European Midday Update: Markets Wait Quietly for Greenspan's Speech

British Airways dips lower as the U.S. warns that KLM won't provide a "back door."

Author:: TSC Staff
Publish date:: Jul 20, 2000 7:12 AM EDT

British Airways dips lower as the U.S. warns that KLM won't provide a "back door."

LONDON -- When Alan Greenspan speaks, the world listens.

"It's definitely going to be a long day," moaned one senior trader, explaining that with the U.S.

Federal Reserve chairman due to speak to Congress later Thursday, volume in European markets was decidedly on the thin side.

Nevertheless, share prices in London were holding up well given the nasty overnight falls on Wall Street. By midmorning, the

FTSE 100

was up 18.1 points to 6483.5, and the

Techmark

, to some extent reflecting the

Nasdaq

fall, had eased 7.4 points to 3650.0.

British Airways

(BAB) - Get Report

dipped 5p lower to 383 ($5.71) after the U.S. administration warned that it would take action to prevent British Airways using its merger with

KLM

(KLM)

to get more access to U.S. airports unless an open skies agreement is reached with the U.K. Dorothy Robyn, a senior White House official, was quoted as saying "the U.S. will not allow British Airways to use a merger with KLM as a back door to achieve greater access to our market."

Pharmaceutical shares fell after the U.S.

Senate

voted for drug-import legislation aimed at lowering drug prices.

Glaxo Wellcome

(GLX)

fell 15p to

18.02 and

Smithkline Beecham

(SBH) - Get Report

dipped 15p to 813.

HSBC

argued investors should reduce holdings in both stocks.

Among the tech shares,

Sema

held steady at

10.11 ahead of a conference later Thursday to talk about the deal with

United States Cellular Corporation

(USM) - Get Report

, which has chosen Sema's over-the-air-activation solution for its networks.

Credit Suisse First Boston

recommended Sema stock Thursday morning.

Most of Europe's other major stock markets were higher early, as the markets shrugged off the

European Central Bank's

decision on interest rates that will be made this afternoon. With the ECB expected to keep things on hold, the

Xetra Dax

in Frankfurt rose 40.92 to 7407.49 and the

CAC 40

in Paris gained 59.22 to 6554.33. The

Neuer Markt's

tech-heavy

Nemax 50

index moved 4.0 higher to 6276.6.

Deutsche Telekom

(DT) - Get Report

plummeted 2.45 euros to 57.95 amid reports it had launched a formal $53 billion bid for U.S. wireless operator

VoiceStream

(VSTR)

. While the price sounds steep to investors, it may be necessary to head off a bid from Japanese rival

NTT DoCoMo

(NTT)

Elsewhere in European telcos,

France Telecom

(FTE)

rose 3.40 euros to 154.40 and

Telefonica

(TEF) - Get Report

rose 0.10 euro to 24.70.

Vivendi

climbed 1.35 euros to 90.75 before the midday trading start of its utilities unit Vivendi Environnement. Vivendi priced the shares last night at 34 euros each, below the midpoint of the price range of 33 to 36 euros.

In Frankfurt, big German technology shares were higher, with

Epcos

(EPC) - Get Report

up 0.35 euro to 119.90 and

Siemens

up 1.11 euros to 177.11. Hours before reporting second-quarter results software maker

SAP

(SAP) - Get Report

rose 5.27 euros to 224.23.