European shares were off their lows yesterday afternoon as DaimlerChrysler recovered from earlier losses after topping a profit forecast, while strong US data were also supportive.
The German-American carmaker, the world's fifth-biggest, posted a 2003 operating profit excluding one-offs of €5.1 billion, surpassing its full-year target of €5 billion.
Daimler shares turned 0.4 per cent higher to €37.4 after being down about 1.5 per cent before the group unveiled its annual scorecard.
Pan-European benchmarks were still weighed by falls in German drug firm Bayer and Spanish bank Banco Bilbao Vizcaya Argentaria.
The FTSE Eurotop 300 index was off 0.2 per cent at 979 points by 1525 GMT, as its recent push to 17-month highs becomes bogged down in profit-taking and doubt about pushing bourses even higher in the short-term. Technology, media, telecoms and insurers, four sectors that how shown the best gains so far this year, were among the hardest hit.
"It's a market that has clearly been overbought in some sectors, and in the wake of good results here and in the US, people have been taking some profits," said Florian van Laar, fund manager at Eureffect asset management in Amsterdam.
The DJ Euro Stoxx 50 index shed 0.5 per cent to 2,826 points.
An Institute of Supply Management survey showed the US services sector forging ahead at a record pace in January - echoing strong business activity surveys in Europe also released yesterday.
Separately, December factory orders rose 1.1 per cent, after a 0.9 per cent drop in November and topping forecasts for a 0.2 per cent increase.
Economists said the data were supportive though many investors were looking for guidance from the week's key number, US non-farm payrolls due tomorrow, when finance ministers of the top seven richest nations also meet to discuss the ailing dollar.
"People are waiting for Friday's payrolls numbers and the G7. The factory orders were good so things are moving," said Matthew Wickens, an economist at ABN AMRO bank.
On Wall Street, the Dow Jones industrial average was flat at 10,500 points as it shed opening losses after the data were released.
The Nasdaq Composite was down 1.2 per cent at 2,040 as the tech-studded index was weighed by investor disappointment over an outlook given by networking giant Cisco Systems.
Drug group Bayer of Germany and Belgium's UCB both tumbled as the threat of cheaper copy-cat drugs to compete with them in the United States loomed.