European shares were mixed yesterday as gains for oil companies struggled to counter weak technology and insurance groups, and a Wall Street hit by broker downgrades of blue chip General Electric.
Tobacco shares also fell after an earnings warning from US peer Philip Morris, but media shares were strong, along with basic producers and chemicals.
"I do get a sense that things may be a little bit calmer, and that we are trying to stabilise," said David Thwaites, European strategist at BNP Paribas.
By 1532 GMT, with only Frankfurt still officially trading, the FTSE Eurotop 300 index was a fraction firmer at 859.71 points - its third day of gains - with advancing and declining issues evenly matched.
The benchmark ended the week up just over one per cent after closing on Monday at its weakest level since April 1997.
However, the narrower DJ Euro Stoxx 50 index shed 0.8 per cent to 2,354 points.
On Wall Street, the Dow Jones industrial average fell 1.3 per cent as the Nasdaq Composite gained 0.7 per cent.
"My feeling is we are through the worst, but I still think the trend for the next month to three months is sideways to lower, which is an improvement on the sharp falls we have seen," Thwaites said.
News on the US economy was better than expected, helping to ease a little the fear of another recession.
Final second quarter GDP data showed that the US economy grew at a slightly better-than-expected rate of 1.3 per cent.
The University of Michigan's final September consumer sentiment index fell for the fourth month in a row, but the drop was slightly less than forecast.
Oil stocks rose as crude oil prices held their strong levels after the United States stepped up the pressure for a tough UN resolution on Iraq.
Crude oil gains reflect fear of a US-led military attack on Iraq potentially disrupting supplies in the oil-rich Middle East.
Benchmark November delivery Brent oil was trading at $28.85 a barrel, off a modest four cents on the day.
Oil sector leader BP gained 2.5 per cent, with Shell up 2.1 per cent, and TotalFinaElf 1.7 per cent ahead.
Belgian retailer Delhaize was among Europe's biggest losers after UBS cut the stock to "reduce" from "hold" and slashed its price target to e14 from e37.
The share fell 8.9 per cent to e17.3. Elsewhere, Dutch food group Numico fell 13.6 per cent after a Dutch newspaper cited concerns among some investors that the company may have to issue new shares to prop up its balance sheet.
Consumer cyclicals such as Imperial Tobacco were under the cosh after US tobacco giant Philip Morris cut its earnings outlook, citing weak economic conditions, sharp increases in state excise taxes and competition from cheaper brands.
Imperial shed four per cent, while sector peers British American Tobacco lost 2.2 per cent and Gallaher eased 2.9 per cent.
The mood was also dented after Lehman Brothers and Credit Suisse First Boston cut their investment ratings on Dow component General Electric, after the conglomerate held a conference call with analysts.
Telecom equipment makers were hit after SBC Communications, the second biggest US phone company, announced it would cut 11,000 jobs and slash capital spending.
French telecoms equipment manufacturer Alcatel fell 6.4 per cent.
Elsewhere in the technology sector, Merrill Lynch cut its earnings forecast for SAP, Europe's biggest software maker, because it was concerned about the outlook for the second half and 2003, sending the stock down 2.3 per cent.
German chipmaker Infineon dropped three per cent after Goldman Sachs investment bank cut is 2003 earnings per share forecast for the group due to weak memory chip prices. Chip and electronics group Philips shed 3.2 per cent.