FRANKFURT -- Stocks opened higher after yesterday's mild profit-taking but slipped off their highs as the
failed to cut interest rates.
Despite the widespread acknowledgment that the German central bank wouldn't cut rates today, the news hurt stocks and moved currencies as well, indicating that some traders had taken long positions just in case. The dollar rose near 1.66 marks before slipping back to 1.6468.
In Frankfurt, the
was down 10 points at 4524, while in London the
was up 24 at 5231 and in Paris the
was up 4 at 3445.
futures were up 1.20 at 1074, while U.S. long bond prices were little changed, with the yield at 5.06%.
Gary Dugan, European equities strategist at
in London, said his bearish stance had not been swayed by the recent rally. He said the economic picture across Europe is turning more negative with each passing week, and he expects this to hit company profits.
"There are still a lot of black holes lurking out there in coming months," he said. He believes most of the recent gains came on buying by traders looking for short-term profits, and that a lot of longer institutional buyers have been more cautious.
Among the biggest losers today were
DT ADR), down 5.7% on a magazine report that it will suffer a steep decline in profits next year. And
DAI ADR) was down 2%. Daimler chief said in a magazine interview that a recession might soon hit the auto industry.
Among the biggest gainers today was German telecom
, which rose 7.6% on a news report that its head expects a sharp increase in 1998 sales. European software makers enjoyed spillover from strong tech gains yesterday on Wall Street, with
SAP ADR) up 5.8% and French software maker
Demand for most banks stocks continued firm enough to keep many in positive territory today, partly on hopes that the Bundesbank and other core Euroland banks will cut rates in coming weeks.
was up 2%,
up 1.6% and