European Factors to Watch-Shares to fall for 3rd day ahead of U.S. jobs data

Fri Aug 1, 2014 2:44am EDT

(Adds live quote)
    By Francesco Canepa
    LONDON, Aug 1 (Reuters) - European equity indexes were seen trading in a
tight range early on Friday as investors held fire ahead of U.S. jobs data
expected to shed light on the chances of an early end to the Federal Reserve's
ultra-easy, equity-friendly monetary policy.
    While positive for the global economy at large, a strong U.S. employment
report would strengthen the case for an early interest rate hike by the Fed,
whose monetary largesse has been key in fuelling a nearly 40 percent rally in
European equities over the past two years.
    "I still think good data is good for the stock market in the long term
because it means the global recovery is still on track," Farhan Ahmad, a trader
at Tradenext, said.
    "Short term, however, we may see some reverberation in the stock market and
some further weakening."
    At 0640 GMT, futures for the euro zone Euro STOXX 50, Britain's
FTSE 100, Germany's DAX and France's CAC were between
flat and 0.2 percent higher.
    The Euro STOXX 50 recorded its steepest monthly loss in over a
year in July, falling 3.4 percent on the back of concerns about a Fed rate hike
in light of strong U.S. GDP and labour costs data earlier this week, as well as
geopolitical tensions in Ukraine and the Middle East.
    The U.S. S&P 500 stock index posted its worst daily fall since April
on Thursday, while the CBOE Volatility index, often referred to as Wall
Street's fear gauge, jumped 27.2 percent to close at 16.95, its highest level
since April 11.
    Sentiment improved somewhat overnight after Chinese data showed a
surprisingly strong pick up in manufacturing activity in the world's second
largest economy.
    U.S. non-farm payrolls, due at 1230 GMT, were expected to show 233,000 jobs
were added last month, with the unemployment rate seen steady at 6.1 percent.
    Euro zone manufacturing data for July was also due for publication, at 0800
GMT.
    In the meantime, results from a number of European blue-chip companies were
set to keep investors busy.
    Europe's second-biggest insurer, AXA reported a
better-than-expected first-half net profit while Arcelormittal, the
world's largest steelmaker, cut its forecast for earnings this year after
lower-than-anticipated iron ore prices.   
    French cosmetics giant L'Oreal reported a slightly
lower-than-expected rise in second-quarter comparable sales and said growth at
its consumer goods division was held up by sluggish demand in the United States.
 
    
    Europe bourses in 2014: (link.reuters.com/pad95v)
    Asset performance in 2014: (link.reuters.com/rav46v)
------------------------------------------------------------------------------
  MARKET SNAPSHOT AT 0642 GMT: 
    
                                                 LAST   PCT CHG       NET CHG
 S&P 500                                     1,930.67      -2 %         -39.4
 NIKKEI                                      15523.11   -0.63 %        -97.66
 MSCI ASIA EX-JP                               503.78   -1.12 %          -5.7
 EUR/USD                                       1.3386   -0.01 %       -0.0002
 USD/JPY                                       102.94    0.15 %        0.1500
 10-YR US TSY YLD                               2.574        --          0.02
 10-YR BUND YLD                                 1.168        --          0.00
 SPOT GOLD                                  $1,284.20    0.16 %         $2.11
 US CRUDE                                      $98.08   -0.09 %         -0.09
 
  > ASIA STOCKS PRESSURED BY WALL ST, BUT CHINA HELPS         
  > S&P500 INDEX POSTS WORST FALL SINCE APRIL; INDEXES DOWN FOR JULY 
  > NIKKEI DROPS ON CONCERN ABOUT U.S. RATES; SONY, PANASONIC SHINE  
  > TREASURIES-PRICES STABILIZE ON MONTH-END DEMAND                
  > DOLLAR PAUSES NEAR 10-MONTH HIGH AHEAD OF U.S. JOBS DATA       
  > GOLD NEAR 6-WEEK LOW, POISED FOR THIRD WEEKLY LOSS             
  > COPPER UNDERPINNED AS CHINESE FACTORY ACTIVITY GATHERS STEAM  
  > BRENT HOLDS NEAR $106 AFTER AMPLE SUPPLY PULLS DOWN PRICES      
    
    COMPANY NEWS
    
    L'OREAL 
    The French cosmetics giant reported a 4.1 percent rise in second-quarter
comparable sales, slightly below expectations, and said growth at its consumer
goods division was held up by sluggish demand in the United States.
 
    
    GDF SUEZ 
    The gas and power group reported a 14 percent drop in first-half core
earnings, due largely to unseasonably warm weather and falling power prices in
Europe, the temporary closure of two nuclear reactors in Belgium and a drought
in Brazil that hit hydropower generation. 
    
    SOCIETE GENERALE 
    France's No. 2 listed bank on Friday reported second-quarter net profit of
1.03 billion euros ($1.38 billion), up 7.8 percent from a year ago helped by
lower expenses and a reduced cost of risk. 

    
    AXA 
    Europe's second-biggest insurer, reported a better-than-expected 25 percent
increase in first-half net profit on a comparable basis, boosted by strong
earnings growth and a favourable impact of lower interest rates on the value of
its financial assets. 
    
    ARCELORMITTAL 
    The world's largest steelmaker cut its forecast for earnings this year after
lower than anticipated iron ore prices ate into the profit of its mining
business. 
    
    VINCI 
    Europe's biggest construction and concessions company warned it expects a
slowdown in the second half of 2014, especially outside Europe, and a slight
decrease in its revenue for the year on a like-for-like basis. 
    
    ILIAD, DEUTSCHE TELEKOM 
    French telecommunications company Iliad SA has made a surprise
offer for T-Mobile US Inc, setting up a potential bidding war with
Sprint Corp, the U.S. mobile carrier now controlled by Japan's Softbank
Corp. 
    
    WACKER CHEMIE 
    German specialty chemicals maker said its core profit rose by more than a
fifth in the second quarter, driven by a recovery in prices and demand for
polysilicon, its most important product, which is needed to make solar cells.
 
    
    BNP PARIBAS 
    The French bank said it had agreed to buy an 81.4 percent stake in DAB Bank
AG from UniCredit unit Hypovereinsbank at 4.78 euros a share
in a deal that values the whole of DAB at 435 million euros. 
    
    NATIXIS 
    The French bank reported second-quarter net profit rose 29 percent to 33
million euros and confirmed it had at the end of June wound up "bad bank" GAPC,
set up after the 2008 financial crisis to hold toxic assets. 
    
    LAGARDERE 
    The French media group reiterated its full-year target for flat to 5 percent
higher recurring media operating profit despite a first-half drop due to what it
called an expected decline at its publishing unit. 
    
    CNP ASSURANCES 
    Mutually owned French bank BPCE and listed insurer CNP Assurances have
reached a new seven-year co-insurance partnership deal beginning in 2016 that
could resolve how to proceed after their current deal expires at the end of next
year. 
    
    FIAT 
    Holds extraordinary shareholders' meeting (0900 GMT).
    Fiat shareholders are expected to approve the Italian carmaker's merger with
its U.S. unit Chrysler on Friday, a union aimed at boosting the world's
seventh-largest auto group's appeal with foreign investors and paving the way
for a U.S. share listing. 
    
    UNICREDIT 
    HypoVereinsbank, the German arm of Italy's UniCredit, said on Thursday that
an internal probe concluded that the bank had conducted "cum-ex" transactions,
also known as dividend stripping, that had helped clients avoid
taxes. 
    
    CORPBANK  
    Holders of dollar-denominated bonds at Bulgaria's Corporate Commercial Bank
(Corpbank) are gearing up for legal action against the government if the bond
defaults and the bank is tipped into insolvency, two sources told Reuters on
Thursday. 
    
    SBERBANK 
    Shares in Russia's largest bank dragged Moscow stocks down on Friday after
the European Union hit it with sanctions, limiting its access to foreign
capital. 
    
    ENI 
    State-run Petroleos de Venezuela delivered in June to Eni a 240,000 barrel
jet fuel cargo that had been tendered in May on the open market, according to an
internal PDVSA document seen by Reuters on Thursday. 
    Eni CEO Claudio Descalzi on Thursday said the Italian major intends to sell
off a stake in engineering subsidiary Saipem in the future but does not want to
break up the business. 
    
    ROYAL DUTCH SHELL PLC 
    Woodside Petroleum Ltd failed to win shareholder approval to buy
back $2.68 billion of its shares from Royal Dutch Shell, Australia's top oil and
gas company said after a vote on Friday. 
    
    PRYSMIAN 
    Prysmian Group estimated problems with the installation of cables between
Scotland and England would cost it 167 million euros ($224 million), leading it
to lower its full-year forecast of adjusted core earnings on
Thursday. 
    
    FINMECCANICA 
    Italian defence group Finmeccanica reaffirmed its full-year forecast on
Thursday even though defence budget cuts, especially in the United States,
pushed first-half core earnings 18 percent lower. 
    
    CNH INDUSTRIAL 
    Tractor and trucks maker CNH Industrial said on Thursday its second-quarter
net profit inched higher after lower sales of agricultural machinery were offset
by higher deliveries from its propulsion and transmission systems
unit. 
    
    SAFILO 
    Italian eyewear maker Safilo Group posted on Thursday a 23 percent rise in
adjusted net profit in the second quarter as sales grew faster in Europe and
weather in North America improved after a harsh winter. 
    
    GEOX 
    Italian shoemaker Geox confirmed its forecast of breaking even at the
operating level this year after sales rose in the first half including in its
weak home market, which accounts for a third of its revenue. 

 (Reporting By Francesco Canepa; Editing by Atul Prakash)
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