By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets struggled for
direction as earnings reports from heavyweights such as Unilever
PLC and Novartis AG gave reason for some optimism Wednesday, while
investors also looked ahead to a budget vote in the U.S.
The Stoxx Europe 600 index was marginally lower at 287.60,
swinging between small gains and losses.
Shares of Alcatel-Lucent posted one of the biggest gains in the
index, up 4.4%, after Citigroup lifted its rating on the
telecom-equipment supplier to neutral from sell.
Also among the risers, shares of Unilever PLC (UL) picked up
2.5%, after the consumer-products major reported a 5.4% rise in
full-year profit as sales accelerated.
In the same vein, shares of Novartis AG put on 2.8%. The Swiss
drug maker said profit rose but sales stagnated in the fourth
quarter, adding that it expects to return to growth next year.
U.S. budget focus
For the broader stock markets, investors trained their attention
on the next moves in what have been highly contentious U.S. deficit
talks.
The House of Representatives was due to vote on raising the U.S.
debt limit through the middle of May, while President Barack Obama
was expected to sign the bill if it passes Congress.
U.S. stocks ended higher on Tuesday, supported by encouraging
earnings. Tech majors Google Inc. (GOOG) and IBM Corp. (IBM) both
issued upbeat results after the close on Wall Street.
U.S. stock futures pointed to a lower open on Wall Street.
Closer to home, European Central Bank President Mario Draghi
said late Tuesday that the darkest clouds over the euro zone have
subsided.
"We can begin 2013 on a more confident note, precisely because
significant progress was made during 2012," he said in a speech at
the Frankfurt Chamber of Commerce and Industry.
Movers
The German DAX 30 index rose 0.2% to 7,711.10, as shares of SAP
AG (SAP) took on 2%. The software firm said it expects rapid growth
to continue in the year ahead and said momentum "has never been
stronger".
On a more downbeat note, heavyweight industrial firm Siemens AG
(SI) dropped 0.9%. The company said net profit in the three months
to Dec. 31 dropped 12% as orders slipped.
And in France, shares of BNP Paribas SA lost 1.3%, after
Deutsche Bank cut its rating on the bank to hold from buy, saying
the stock had reached its target price.
Other Paris-listed banks also traded lower, with shares of
Credit Agricole SA off 2.1% and Société Générale SA down 1.6%.
The CAC 40 index moved down 0.2% to stand at 3,733.67.
Among U.K. stocks, shares of TUI Travel PLC gave up 4.4%, as TUI
AG said it won't bid for the British travel agent, ditching a plan
to merge the two companies. Shares of TUI AG slumped 5.6%.
Shares of Barclays PLC (BCS) put on 0.6%, as a representative
told The Wall Street Journal that the bank has started looking into
potential job cuts at its U.K. investment-banking business, as part
of a formal review.
London's FTSE 100 index rose 0.1% to 6,186.75.
Outside the major European indexes, shares of Nokia Corp. (NOK)
gained 1.5% to EUR3.47, after J.P. Morgan Cazenove lifted the
Finnish handset maker's price target to 2 euros ($2.66) from
EUR1.20 previously.
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