FRANKFURT -- Mergers again dominated Monday in Europe, lifting markets to solid gains.
agreed to merge with
in a $17.2 billion stock deal creating
, which would become one of Europe's largest banks along with
Trading of both Societe Generale and Paribas was suspended until later this afternoon, but the merger news sent other bank shares higher.
Banque Nationale de Paris
was up 6%,
up 4.3% and
Also in merger news, U.K. insurance firm
Guardian Royal Exchange
has agreed to a $5.6 billion takeover by French insurance group
. Axa is making the purchase through
Sun Life & Provincial Holdings
, in which it owns a 72% stake. Guardian Royal was down 0.5%, while Axa was up 1.3%.
But Germany insurers benefitted from the news, with
In Frankfurt, the
was up 98 points, or 1.9%, at 5278, while in London the
was up 116, or 2%, at 6012 and in Paris the
was up 76, or 1.8%, at 4328.
In addition to merger fever, the stock market was underpinned by continued dollar strength. European exporters benefit from a strong dollar. The euro was last bid at $1.1358, and against the yen the dollar was at 116.30. The U.S. long bond was yielding 5.08%.
Despite the strong gains across Europe, some investors want to see what kind of mood Wall Street is in. Stocks indices here have spent the last few hours hovering in fairly tight ranges ahead of New York's open.
futures were last up 4.50 points at 1286.
There was little discussion here of a weekend comment from
. At the World Economic Forum in Davos, Switzerland, the Mister Softee CEO became the latest to bash sky-high Internet stock valuations, saying that he did not recommend Web stocks "to people who don't like massive risk."
was fretting last week about Internet valuations.
And if contrarians were seeking another reason to buy Internet stocks, they got it from the latest edition of the
, which warned in a cover story: "Why Internet shares will fall to earth."
Today's gains in Europe, combined with a strong finish at the end of January, have transformed some cautious bears into cautious bulls. Nick Glydon, technical analyst at
Robert Fleming Securities
in London, said, "The bears are giving up slowly."
Glydon said that he has been focusing on the January performance of major indices. Believers of the so-called January barometer, which holds that indices posting a gain in January will do so for the year, should be encouraged. Glydon said that last month the CAC gained 7.8%, the Dax rose 3.5% and the FTSE 100 edged up 0.2%. Major U.S. indices also were winners in January.
But Glydon said he remained cautious, awaiting confirmation of a fresh bull trend from the CAC. If the CAC can take out its closing record high of 4388 set last summer, he expects a powerful rally across Europe.
"I am waiting with my finger on the buy button," he said.