July 25, 2014 / 5:41 AM / in 3 years

European Factors to Watch-Falling earnings seen weighing on shares

(Adds detail, quote)
    EDINBURGH, July 25 (Reuters) - European stocks were seen edging lower on
Friday, held back by some earnings disappointment on both sides of the Atlantic,
with the latest German Ifo business-climate survey also due to be in focus.
    Cement maker Lafarge, food group Danone and exchange
operator Deutsche Boerse all posted falls in profit on Friday.
    At 0619 GMT, futures for the Euro STOXX 50, Britain's FTSE 100
, Germany's DAX and France's CAC were 0.2-0.3 percent
    In Europe so far this quarter, 40 percent of companies have missed earnings
expectations, according to Thomson Reuters StarMine data, underperforming the
United States where the number is 28 percent.
    U.S. online retailer Amazon fell in out-of-hours trading on Wall
Street after it posted a much larger-than-expected loss in the second quarter,
while Caterpillar, the world's largest maker of earth-moving equipment,
fell after cutting its outlook for sales.
    More news was expected on the data front in Europe as market research group
GfK found that German consumer morale rose to its highest level since 2006,
ahead of the closely watch Ifo business climate survey.
    Both the GfK figures and Thursday's encouraging Purchasing Managing Index
(PMI) figures, which showed the euro zone's private sector expand at the fastest
rate in three months, have raised expectations for the Ifo, which consensus
suggests will decline to 109.4.
    "Following yesterday's PMI readings I imagine most analysts will have raised
their expectations for (the Ifo) and I think we're likely to get a comfortable
beat here," Craig Erlam, market analyst at Alpari, said. 
    "The only question now is how much more has been priced into the markets."
    Europe bourses in 2014: (link.reuters.com/pad95v)
    Asset performance in 2014: (link.reuters.com/rav46v)

    0600 DE GfK Consumer Sentiment
    0800 DE Ifo Business Climate, Current Conditions, Expectations
    0800 IT Wage Inflation
    0830 GB GDP Prelim
    1230 US Durable Goods
                                    LAST       PCT CHG  NET CHG
 S&P 500                            1,987.98   0.05 %   0.97
 NIKKEI                             15457.87   1.13 %   173.45
 MSCI ASIA EX-JP                    507.4      -0.24 %  -1.23
 EUR/USD                            1.347      0.04 %   0.0006
 USD/JPY                            101.73     -0.08 %  -0.0800
 10-YR US TSY YLD                   2.500      --       -0.01
 10-YR BUND YLD                     1.173      --       -0.01
 SPOT GOLD                          $1,292.40  -0.05 %  -$0.60
 US CRUDE                           $102.07    0 %      0.00
  > GLOBAL MARKETS-Asian shares inch down from 3-year highs        
  > US STOCKS-Wall St ends flat on mixed earnings; S&P 500 at record    
  > Nikkei rises after S&P hits fresh high; Fanuc surges on strong earnings 
  > TREASURIES-Prices falter on unexpectedly low U.S. jobless claims     
  > FOREX-Dollar, euro propped up by better economic data            
  > PRECIOUS-Gold set for second weekly loss on strong economic data    
  > METALS-Copper eyes fifth weekly rise in six, but headwinds loom    
  > Brent holds above $107 as political tensions balance supplies         
    Cement maker Lafarge, which is preparing to merge with Swiss peer Holcim 
, stuck to its full-year targets on Friday after a first-half
performance weighed down by adverse currency rates and asset sales.
    The French food group posted a worse-than-expected 10 percent fall in
first-half operating profit on Friday, hit by weak sales of dairy products in
Europe and baby food in Asia.
    Germany's flagship lender is planning to cut an additional up to 2.5 billion
euros ($3.4 billion) in costs by 2018 as it is trying to hike its
competitiveness, Handelsblatt reported. 
    Related news  
    The exchange operator's second-quarter operating profit fell by eight
percent as sluggish trading of stocks and derivatives weighed on the exchange
operator's revenues. 
    Related news 
    Germany's largest airline on Thursday said it would keep flights to Tel Aviv
suspended on Friday, citing security concerns. 
    Related news 
    The carmaker is considering setting up a planning centre in Brazil to boost
flagging sales in the world's fourth-largest car market, sources told Reuters.
    Related news 
    Britain's pay-TV group BSkyB will on Friday unveiled its
multi-billion euro deal to buy Rupert Murdoch's assets in Italy and Germany,
sealing a plan to create a pan-European giant with almost 20 million customers.
    Under the proposal BSkyB will buy all of Sky Italia and 57 percent of Sky
Deutschland from Murdoch's 21st Century Fox. 
    Related news    
    Spanish media group Prisa said on Thursday it had sold an 8.5 percent stake
in peer Mediaset Espana back to Mediaset Espana for 307.5 million euros or 8.892
euros per share. 
    Spain's Caixabank CABK.MC on Friday said net profit in the second quarter
more than doubled to 153 million euros from a year ago, beating forecasts as
revenue grew more than expected. 
    The Italian luxury eyewear group is optimistic about prospects for the rest
of 2014 after sales accelerated in the second quarter, offsetting the impact of
euro strength which is now seen waning. 
    Luxottica said on Thursday it had extended a licence  agreement to produce
and distribute Chanel-branded eyeglasses until the end of 2018, renewable for a
further two years.
    The Italian mid-sized bank said late on Thursday it was in exclusive talks
with U.S. investment fund Apollo Management Holdings LP for the sale of its two
insurance units.
    The Italian gas grid operator is set to sign next week an accord to
renegotiate its 3.2 billion euros in debt with a pool of 16 banks led by
UniCredit and BNP Paribas, Corriere della Sera reported
without citing sources. The new bank loan will have the same maturity of the
present one and will have a multi-tranche, revolving structure.

 (Reporting by Alistair Smout; Editing by Lionel Laurent)

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