European shares end flat after mixed earnings

European stocks closed little changed yesterday after mixed company earnings, while data showed the region's economic recovery was on track.

UBS was a standout loser, down five per cent after the investment bank reported a worse-than-expected fall in third-quarter profit. Automaker DaimlerChrysler rose three per cent after an upbeat magazine report.

The pan-European FTSEurofirst 300 index ended 0.07 per cent down at 1,443.9, extending a three-day losing streak and distancing itself from its highest level in five years struck last week. The index is still up 13 per cent so far this year.

Fund managers said some company earnings were patchy but that overall results were still supporting stock markets.

"At the moment, disappointments are company specific and in areas known to be volatile, difficult or unpredictable like with UBS today," said Mark Bon, a fund manager at Canada Life.

"There's still a little scope for people to get enthusiastic on the back of reasonably okay earnings, and European economic prospects are improving.

Europe's economic recovery showed further signs of robust health as reports revealed French unemployment at a five-year low, euro zone inflation heading down and economic confidence on the rise again.

US stocks were mixed by the close of European markets after consumer confidence and Midwest business activity data cast doubt on the outlook for corporate earnings.

DaimlerChrysler topped gainers in Frankfurt's DAX 30 index by rising 3.1 per cent in strong volumes to €44.7 after German business magazine Focus-Money said the stock was fairly valued at €55, dealers say.

"DaimlerChrysler is still benefiting from the surprisingly good earnings last quarter and has since shown strength in the car sector," said Thomas Gruener, a market analyst at Landesbank Berlin.

Among European indexes, France's CAC 40 fell 0.25 per cent, Germany's DAX gained 0.2 per cent and Britain's FTSE 100 was flat.

"We are halfway through the Q3 earnings release season, and so far it has been positive overall, although there were profit warnings as shown with the auto and pharma sectors," strategists at Societe Generale said in a note.

"More results are to come, and we believe they should be good."

Among gainers, UK's Imperial Tobacco reported a rise in annual earnings and said it was seeking acquisitions but that there was not much on the agenda. Its shares advanced one per cent.

Sanofi-Aventis fell 2.8 per cent after continued uncertainty about the possible launch of key new anti-obesity pill Acomplia weighed on the stock and overshadowed stronger-than-expected results.