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European Midday Update: Markets Steady After Initial Fall

European markets have leveled off and traders are waiting to see what happens in the U.S.
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LONDON -- The U.K. equity market is by no means out of the woods and the FTSE 100 was down 214.2 to 5963.9, but traders note that this is nearly 50 points above its early morning low and it appears the savage opening markdown has all but halted potential sellers in their tracks. The only problem is it frightened off buyers too, even at the lower levels, and trading has just about halted.


Standard & Poor's futures contract, a good indicator of how Wall Street will open today, is well off its early morning low. It has cut an initial 20-point loss to 7, but buyers are still reluctant to open new positions and will probably wait until they get a clear indication as to whether the

Dow Jones Industrial Average

will continue its slide, or whether a rally will ensue.

"The one thing to remember about this market is that it's not been tested yet. The initial markdown has killed most of the selling, but another


wobble could frighten a few players out," commented a leading market maker. "Just now, we're hardly quoting, let alone dealing. We've just got to wait for Wall Street."

Vodafone AirTouch

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accounted for about 50 points of the Footsie fall because of its index weighting, the shares falling 18p to 283 (US$4.49). Other major fallers in the Footsie were those shares with ADRs, namely

British Telecom


, down 38p to


Cadbury Schweppes

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, down 17.5p to 433;



, down 20.75p to 556;



, down 215p to

25.00; and


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, down 14.75p to 409.



index, however, bumped along close to its sharply lower opening level, and was displaying a fall of 296.9, or 8.4%, to 3241.0.

The tech shares are looking a little steadier, but the overall mood is still tense, awaiting the next Nasdaq move this afternoon.

Baltimore Technologies


recovered from

41.00 to stand 569p lower at

47.75, and


clawed its way back from

21.00 to trade 94p down to


ARM Holdings


was down 293p to


The Continent's markets were also holding up after an initial fall, with most of the major indices well off the day's lows. The

Xetra Dax

in Frankfurt was down 173.94 to 7010.32 and the

CAC 40

in Paris was off 145.71 to 5920.00.

In Frankfurt, it appeared that so long as Wall Street doesn't tank at the open, the damage could be contained, for the most part. Technology stocks looked to be on the mend, with software maker


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down 3.95 euros to 596.05 (US$571.21),



0.30 euro higher to 135 and


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having an absolutely grand day, up 3.75 euros to 119.85.

Likely of most interest to many European investors Monday was the debut of

Deutsche Telekom's

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Internet unit


on Frankfurt's

Neuer Markt

. After DT set a very low initial price of 27 euros per share over the weekend for the Internet service provider, T-Online was able to eke out modest gains to 33.95 euros despite all the commotion on the world's markets.

Although it appeared the telco had averted a total disaster with the T-Online IPO, Deutsche Telekom itself wasn't as fortunate, shedding 0.86 euro to 69.15. Other European telcos were also lower, but not any more than they might have been on any other trading day.

France Telecom


was down 3.20 euros to 151.80 and


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was off 0.58 euro to 23.72.

Financial stocks were some of the hardest hit shares, with

Dresdner Bank


down 1.52 euros to 44.05 and



sliding 1.85 euros to 40.15.

When it came to U.S. tech stocks, the

Nasdaq 100 futures

, which were down as much as 92 points at one point, eased to down 32.

Emir Siddique, who trades the top 20 Nasdaq stocks on


for London-based

Herzog Heine Geduld International

, said Europe is waiting to take its cue from the Nasdaq.

"The market is very quiet," Siddique stated. "We're seeing a little bit of retail buying, but not much trading."

Much of the sentiment may hinge on the earnings results due today from some heavyweights such as

Texas Instruments

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. A consensus of 27 brokers compiled by

First Call/Thomson Financial

expects the semiconductor company to earn 53 cents per share for the quarter ended March, compared with 33 cents per share for the year earlier period. On Friday, Texas Instruments closed at $139, well off its 52-week high of 199 9/16.

"If Texas Instruments comes up with decent earnings," the trader says, "that could spark a tech rally."

By midmorning, however, U.S. stocks traded on Easdaq were showing declines. Some of the hardest hit were


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, which was off 14.25% to 102.50;



, down 13.63% to 116; and


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, off 8.25% to 110.