FRANKFURT -- The Euro stock market opened higher at the start of a new week, but it quickly lost steam and reverted back to the indecisive, sloppy range-trading seen last week.
Major indices were mixed despite some positive corporate news stories and a strong dollar, which is good for European exporters. Traders said the market's positives were being overwhelmed by continued concern that bond rates might be heading higher and that earnings growth might weaken. And in a repeat of recent sessions, investors today were not willing to place big bets in morning trading, preferring instead to wait for Wall Street to provide direction.
In Frankfurt, the
was up 15 to 4838. In London, the
was down 28 to 6002. In Paris, the
declined 37 to 4092.
The biggest story today was the proposed $58 billion hostile takeover of
. However, the market appeared skeptical that the bid would succeed, and Telecom Italia, although last up 5.6%, had been up 11.5% earlier in the session. Olivetti was down 5.1%.
was up 4.4% on news that it had agreed to pay $8.3 billion for Olivetti's mobile-telephone operator
and fixed-line phone company
. The sale to Mannesmann is contingent on completion of Olivetti's purchase of Telecom Italia.
And Anglo-Dutch consumer giant
was up 4.5% after the
reported the group was considering a $1.6 billion share buyback.
But on the negative side of the equation, Swedish truck and commercial vehicle maker
slid 5.4% after
said it had broken off talks to buy the firm. Volvo, which recently sold its car unit to
to focus on commercial vehicles, was down 1.4%.
The dollar jumped against the yen and the euro after a thundering silence this weekend from
Group of Seven
finance officials about recent greenback strength. Dollar/yen was last at 122.11, while the euro was lately trading at $1.0989.
Nick Stevenson, a European equities strategist at
in London, called the stock market today "uninspiring." He declined to venture an opinion on which direction the market will head in when it finally breaks from the current range, saying only the key factor will be U.S. yields.
But he did say, "Rising interest rates ain't good for the stock market." And he said that while just about anyone throwing money at the broad stock market the past couple of years could produce exceptional returns, 1999 will be different. "You are going to have to work a lot harder this year," he said.
He believes that whether the broad stock market slides or rises, consumer cyclicals such as leisure and media will outperform. He does not recommend industrial or commodity cyclicals.
And he is skeptical of the ability of the broad telecom and financial sectors in 1999 to repeat last year's torrid performance, although he said selected names will be winners. He declined to name names, but said he thinks some telecoms with Internet or mobile-telephone exposure still have growth potential.