European Factors to Watch - Shares seen down as earnings outlook darkens

LONDON, July 11 (Reuters) - European shares were expected to open lower on
Wednesday as lacklustre updates from a number of U.S. companies cast a shadow on
the upcoming earnings season and lingering uncertainty on political progress in
tackling the euro zone crisis capped any upbeat sentiment.
At 0625 GMT, futures for the Euro STOXX 50 were down 0.7 percent
while contracts on Germany's DAX and France's CAC were 0.6
percent lower. Financial spreadbetters earlier expected Britain's FTSE 100
to open 25 to 27 points lower, or as much as 0.5 percent.
European equities had snapped a four-day losing streak on Tuesday, bouncing
off a technical support on the perception that the euro zone was moving closer
to putting its rescue fund into action at a meeting of European finance
ministers in Brussels.
But a sales warning from U.S. engine maker Cummins Inc, coming on
top of earlier weak forecasts from chipmakers Applied Materials Inc and
Advanced Micro Devices, caused U.S. indexes to extend losses in
afternoon trade and dented investor sentiment globally.
"Risk appetite remains fragile as U.S. earnings worries and various
unanswered questions in Europe weigh on sentiment," Credit Agricole said in a
note.
"All-in-all, despite the marginal progress made yesterday (at the European
meeting) there is a long climb ahead before markets can be appeased."
Among issues Tuesday's summit failed to provide clarity about, Credit
Agricole cited how Greece would get through its next bond redemptions, following
a delay in a loan tranche for the country, and the timing for setting up a
single banking supervisor in the euro zone.
Also keeping investors on tenterhooks were comments by Italian Prime
Minister Mario Monti, who said on Tuesday Italy could be interested in tapping
the euro zone's rescue fund for bond support as he comes under intense market
pressure to shape up his economy and avoid being drawn into the centre of the
debt crisis.
A further source of uncertainty for investors was a decision by the German
Constitutional Court to set no date for its verdict into whether the euro zone's
bailout fund, known as the European Stability Mechanism, and planned changes to
the region's budget rules are compatible with German law.
The euro zone Euro STOXX 50 ended the day 0.6 percent higher at
2,241.85 points on Tuesday after bouncing off its 14-day moving average at
around 2,225 points and finding strong support around the 2,220 level, the 50
percent retracement of its June 26 to July 5 leg up, with some investors seeing
value after a drop of 4 percent in the previous four sessions.
After a batch of weak global economic data, investors were expected to
scrutinise U.S. May international trade figures, due for release at 1230 GMT,
May U.S. wholesale inventories, due at 1400 GMT, and the publication of minutes
from the Federal Reserve policy meeting held on June 19-20, scheduled for
release at 1800 GMT.

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GLOBAL MARKETS: Shares fall as growth downturn fuels earnings worries
> More profit warnings hit Wall Street
> Nikkei sags as U.S. firms warn on dropping revenues
> TREASURIES: Prices inch up as safety bid overcomes supply
> Euro near 2-yr lows, German verdict on ESM awaited
> Gold edges up after tumbling on euro zone worries
> Copper climbs on short-covering ahead of China GDP
> Brent rises above $98, shrinking US stockpiles eyed

MARKET SNAPSHOT AT 624 GMT
LAST PCT CHG NET CHG
S&P 500 1,341.4 -0.81 % -10.99
NIKKEI 8,851.0 -0.08 % -6.73
MSCI ASIA <.MIASJ0000 -0.11 % -0.53
EX-JP US>
EUR/USD 1.2256 0.06 % 0.0007
USD/JPY 79.31 -0.11 % -0.0900
10-YR US TSY 1.510 -- 0.01
YLD
10-YR BUND 1.316 -- -0.01
YLD
SPOT GOLD $1,574. 0.43 % $6.77
6
US CRUDE $84.58 0.8 % 0.67

COMPANY NEWS

BURBERRY
The luxury goods firm reports a first-quarter revenue up 11 percent.

AUTO MAKERS
Vehicles sales in China rose 9.9 percent in June from a year earlier, the
China Association of Automobile Manufacturers said on Wednesday.

GLAXOSMITHKLINE
An experimental once-daily AIDS drug from GlaxoSmithKline and its partner
Shionogi proved superior to Gilead's Atripla in a late-stage
clinical trial, increasing hopes for the new product.

JD WETHERSPOON
British pub operator JD Wetherspoon Plc said cost pressures from
government legislation would weigh this year on what has so far been a solid
performance boosted by major events.

VIVENDI
Universal Music, seeking to appease regulators worried about its planned
acquisition of EMI's recorded music business, plans to sell assets and propose a
"manifesto" for restoring growth to the industry, the Financial Times reported
on Wednesday.

BOUYGUES, ILIAD
Martin Bouygues, the head of construction-to-telecom group Bouygues, urged
French lawmakers to take a harder line on new mobile player Iliad, accusing the
newcomer of destroying jobs and not investing enough in its network.

FONDIARIA-SAI, UNIPOL
An Italian court will rule on Wednesday on the appeal filed by Fondiaria's
suitors the Sator and Palladio Finanziaria funds against a regulatory green
light insurance body ISVAP has given to the Unipol-Fondiaria merger.

ARKEMA
The French specialty chemicals group said it planned to sell its tin
stabiliser business to Mount Laurel, N.J.-based PMC Group as it focuses on
faster-growing businesses.

IMPREGILO
Two Milan judges are expected to rule separately on Wednesday morning on
appeals by the Gavio and Salini families over issues relating to their battle
for control of Italy's biggest builder.