FRANKFURT -- Liquidity-rich investors were unable to resist pulling the trigger today after recent sharp losses, helping lift stock indices to modest gains.
Some good earnings and corporate news helped soothe the nerves of investors after the previous dismal three sessions, as did hopes for a higher Wall Street open today. Blue-chips in general were leading the rebound, with telecoms and banks among the biggest winners. Today's gains appeared solid to some traders, who insist that continued high liquidity will provide a strong defense on the downside.
Nonetheless, some potential buyers remained cautious on concerns that the technical outlook appears shaky, that valuations are still too high and that bond yields might move up in coming weeks. And many have no desire to place big bets ahead of
comments today before the House Banking Committee.
In Frankfurt, the
was up 34 to 4848. In London, the
was up 56 to 5826. In Paris, the
was up 33 to 4035.
popped up 9.8% after reporting third-quarter pretax profits up a better-than-expected 17%. In London,
was up 7.1%, and
increased 3.3%. In Paris,
was up 3.6%, while in Frankfurt,
was up 4.6% and
rose 5.4% on relief that the U.K. bank had finally named a new chief after the November resignation of Martin Tayler in November after investment banking losses. Barclays hired Michael O'Neill, president of
financial services group, as chief executive. Other winning banks included
, up 3.6%, and
, up 2.8%.
But not all was well in Europe. Oil giant
dropped 2.4% after reporting sharply lower 1998 profits.
also disappointed on 1998 results, pushing shares down 2.4%.
And in what could be a bad sign for U.S. tobacco names today, shares of
British American Tobacco
in London dropped 4.7% on news that a California jury ordered
to pay $50 million in punitive damages to a woman with lung cancer.
The U.S. dollar was little changed from New York's close, with the euro bid at $1.1318 and the dollar at 114.05 yen.
Thomas Teetz, equities strategist at
in Dusseldorf, believes Euro market losses this week were overdone, saying that some selling was caused by "a little bit of panic."
He disagrees with technicians who expect further losses. "A week ago, these guys were saying everything looked excellent and the market is going higher," Teetz said. He said that in a battle between massive liquidity and weak technicals, he will side with liquidity.
Paul O'Connor, an equities strategist at
Credit Suisse First Boston
in London, agrees that liquidity is high and probably enough to protect the market from a big selloff. But he sees little chance of the market resuming the powerful rally from October of last year.
"There is just not enough confidence to drive the market up," he said. "You have seen the best of the bull market. I think we are in a market that is just going to churn around at these levels."