ASML's shares jump on revised sales forecast; BP, Shell downgraded
LONDON (MarketWatch) -- European shares turned lower on Thursday following five straight sessions of gains, as losses in the mining sector offset gains for technology shares, notably ASML Holding.
After closing with a 0.9% advance on Wednesday, the Dow Jones Stoxx 600 index (ST:SXXP 239.11, -0.98, -0.41%) set a fresh 2009 high in early trading but then weakened through the morning. The pan-European index was recently down 0.3% at 239.41.
Miners' shares pared gains made this week to just under 3%, with BHP Billiton (UK:BLT 1,636, -27.50, -1.65%) (BHP 63.98, -0.96, -1.48%) recently down 1.1% and Vedanta Resources (UK:VED 1,842, -44.00, -2.34%) down 2.3%.
At the regional level, the U.K.'s FTSE 100 index (UK:UKX 4,965, -39.04, -0.78%) declined 0.4% to 4,984.17, surrendering the key 5,000 level ahead of an interest-rate decision from the Bank of England. No change in rates is expected. See full story.
The French CAC-40 index (FR:PX1 3,690, -17.54, -0.47%) lost 0.3% to 3,695.99 as the German DAX index (DX:DAX 5,569, -5.24, -0.09%) traded flat at 5,575.73.
Asian equity markets ended mostly higher, while stock-index futures declined on Wall Street, indicating a softer U.S. start. See Asia Markets. See Indications.
Technology stocks were in focus around the globe, thanks to U.S. chip giant Texas Instruments (TXN 25.14, +0.08, +0.32%) revising its sales outlook for third quarter late Wednesday. See full story.
European investors keyed on another sign that the market may be improving Thursday: an upgraded sales forecast for the second half from ASML Holding (NL:ASML 21.15, +1.01, +5.02%) , shares of which jumped 4.8% in Amsterdam.
The provider of lithography systems for the semiconductor industry commented that business has picked up, translating into third-quarter and fourth-quarter 2009 net sales of above 500 million euros ($727 million) each and third-quarter 2009 bookings significantly above that level. See full story.
Other technology stocks on the move included STMicroelectronics (FR:STM 6.59, +0.13, +2.07%) (STM 9.32, -0.14, -1.48%) , up 1.9%, as well as Infineon Technologies (DE:IFX 3.94, +0.12, +3.15%) , up 3.1%, and Nokia (FI:NOK1V 10.33, +0.12, +1.18%) (NOK 15.12, +0.09, +0.60%) , up 1.2%.
Shares of business software provider SAP (DE:SAP 34.83, +0.19, +0.53%) (SAP 50.48, +1.35, +2.75%) also climbed, up 1.8%. The company reiterated its 2009 forecast late Wednesday.
"We continue to remain overweight the technology sector and view it has the safest way to play the global recovery given the strong balance sheets that the majority of companies have," said Stephen Taylor, strategist at Dolmen Securities.
Weakness among retailers, oils
As well as miners, retail stocks were lagging with U.K. home-improvement and general-merchandise chain Home Retail Group (UK:HOME 306.10, -24.00, -7.28%) down 6.4%.
The firm said it's approaching the key Christmas trading period from a position of operational and financial strength. But it continues to plan cautiously for consumer demand and also expects to experience more significant an impact from currency translations in the second half.
It expects benchmark pretax profit for the fiscal first half to be broadly in line with the 121 million pounds ($200 million) reported a year earlier.
Separately, Morrison Supermarkets (UK:MRW 277.90, -6.60, -2.32%) , down 2.3%, said that it expects market growth to slow in the second half as inflationary pressures ease.
Still, business performance to date, the successful implementation of the firm's optimization plan and continuing customer gains means that Morrison is confident about meeting fiscal-year profit expectations. First-half net income rose to 309 million pounds from 218 million pounds a year earlier.
In the oil sector, shares of BP (UK:BP. 544.65, -9.50, -1.72%) (BP 54.25, -0.70, -1.27%) fell 1.5% as Royal Dutch Shell (UK:RDSA 1,735, -23.00, -1.31%) (RDS .A 57.56, +1.03, +1.81%) shares fell 1.2%.
HSBC said the European oil sector is facing headwinds as it downgraded BP to neutral from overweight and Royal Dutch Shell to underweight from neutral.
"The sector looks undervalued long term but weak oil prices, cheap U.S. gas and soft refining margins pose short-term risks," the broker said.
