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. -------------------------------------------------------------------------------- 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.
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