LONDON -- If it's not

Ericsson

(ERICY)

spreading doom and gloom around the markets, it's

Nokia

(NOK) - Get Report

.

Mobile phone giant Nokia reported second-half earnings pretty much in line with expectations, but news that the company sees Q3 earnings falling below Q2 because of the timing of new product introductions gave the whole of Europe's stock markets the jitters. Nokia's shares took a real drubbing, closing down 12.62 euros, or 21.4%, at 46.28 ($43.04).

British Telecom

(BTY)

rang up impressive early gains after the company reported stronger-than-forecast pretax profits of

561 million ($847 million) in the three months to Jun 30, but that is still down some 27% from the year-earlier period. The shares rose to a session high of 894p, but then fell back to close down 2p, or 0.4%, at 866p.

Vodafone

(VOD) - Get Report

also saw its early gains eroded. The stock touched an intraday high of 311.25p, before heading back down to close 11.5p softer, or 4.1%, at 291.5. This alone was enough to knock around 34 points of the Footsie index. At the mobile phone operator's annual general meeting today, shareholders sanctioned the huge bonus payments to CEO Chris Gent and two other executives as a reward for the successful takeover of

Mannesmann

earlier this year. However, there was a fair amount of heckling at the meeting along the lines of, "Give us back our

10 million."

Strong half-year results from

Glaxo Wellcome

(GLX)

gave the pharmaceutical sector an early boost. The company, which is set to merge with

SmithKline Beecham

(SBH) - Get Report

at the end of the summer, reported pretax profits of

1.6 billion, around

500 million more than the market expected. Buoyant sales, particularly in the U.S., of the company's asthma drug

Flovent

and the HIV treatments

Combivir

and

Ziagen

, were the main drivers of the strong earnings. Glaxo surged 64p, or 3.6%, to close at

19.08, and SmithKline ended 28p higher, or 3.4%, at 853.

News that a U.S. federal judge in San Francisco has ordered online music exchange

Napster

to stop trading in copyrighted work through its was music to the ears of investors in

EMI

. Shares in the world's third largest music company closed up 11.5p, or 1.4%, at 637.

Europe's other bourses ended mixed. The

CAC 40

in Paris closed up 18.53, or 0.3%, at 6,511.5. Late in the German session, the

Xetra Dax

in Frankfurt was down 127.1, or 1.8%, at 7,174.9 and the Neuer Markt's tech-heavy

Nemax 50

index was 117.4 lower, or 1.9%, at 6,070.7.

Deutsche Telekom

(DT) - Get Report

dipped 1.69 euros, or 3.3%, to 49.40, after announcing first-half profit fell to 700 million euros from 950 million euros the year before.

French telco equipment

Alcatel

(ALA)

closed up 3.00 euros, or 3.9%, to 80.50 after reporting better-than-expected second-quarter profits.

France Telecom

(FTE)

ended down 1.20 euros, or 0.9%, at 140.80 and a day after the resignation of embattled chairman Villalonga,

Telefonica

(TEF) - Get Report

finished 0.21 euros higher, or 0.9%, at 23.95.

Big German techs erased early gains, as

Siemens

(SMWAY)

fell 5.50 euros, or 3.2%, at 167.10,

Infineon

(EPC) - Get Report

dropped 2.13 euros, or 2.8%, to 75.31 and software maker

SAP

(SAP) - Get Report

was down 4.25 The Finnish company's fall was enough to take the wind out of the sails of the London market, which looked for much of the day as if it would ignore Wall Street's overnight fall and end the day in the positive territory. Alas, the FTSE 100 closed 35 points lower, or 0.6%, at 6,387.1 and the Techmark was down 3.5 points, or 0.1%, at 3,683.8.