MW: European shares struggle to build on recent gains
Miners advance; Alcatel-Lucent shares jump in Paris
By Sarah Turner, MarketWatch
LONDON (MarketWatch) -- European shares were in a tight range on Monday, struggling to build on a recent run of gains, with losses for drug makers weighing.
The pan-European Dow Jones Stoxx 600 index (ST:SXXP 250.04, -0.26, -0.10%) traded flat at 250.30. The index gained every day last week and ended the week up 3.9%.
"With no major economic news due out today it could be something of a quiet session - over the last couple of weeks global stock markets have made steady gains," said Philip Gillett, trader at IG Index.
Of regional equity markets, the U.K. FTSE 100 index (UK:UKX 5,364, +5.48, +0.10%) rose 0.2% to 5,370.28, the German DAX index (DX:DAX 5,710, -12.76, -0.22%) traded flat at 5,720.70 and the French CAC-40 index (FR:PX1 3,764, -5.44, -0.14%) also traded flat at 3,771.28.
Asian shares ended higher and U.S. stock futures were pointing to mild gains on Wall Street.
The euro edged lower against the dollar, trading at $1.3607, with Greece's ongoing debt woes still in focus for economists.
"Given the potential consequences of a Greek default we continue to believe that financial aid will be provided. But there is a risk that at some point the loss of credibility for politicians could be too damaging to make a U-turn on financial help. Obviously the more definitive the statements become the closer we come to this point," said economists at Goldman Sachs.
Commodity futures were broadly flat, with gold futures down 40 cents at $1,121.90 an ounce. Still, miners managed to gain, with Rio Tinto (UK:RIO 3,485, +69.00, +2.02%) (RTP 216.09, +2.79, +1.31%) , up 2.4%.
Offsetting the gains in the mining sector, however, GlaxoSmithKline (UK:GSK 1,203, -32.50, -2.63%) (GSK 37.45, -0.81, -2.12%) shares were down 2.5%. A report on the Website of the New York Times newspaper over the weekend questioned the safety of the firm's diabetes drug Avandia. GlaxoSmithKline denied any issues with its drug in a statement on its Website in response to the article.
Other drugmakers were also under pressure, with Roche Holding (CH:ROG 182.70, -1.30, -0.71%) (RHHB.Y 42.45, +0.05, +0.12%) shares down 0.8%.
Elsewhere, Alcatel-Lucent (FR:ALU 2.21, +0.12, +5.53%) (ALU 2.97, +0.14, +4.95%) shares jumped 6.2% after Bank of America's Merrill Lynch unit set a 0.44 euro 2012 earnings per share estimate on the telecom-equipment maker, which it said is 70% above consensus estimates.
It said there are positives for the stock that are not understood -- capex moving into areas where Alcatel-Lucent has top market share, tax-driven earnings-per-share, the firm's stronger balance sheet and the industry experience of the firm's CEO.
Turning to earnings reports, and Bunzl (UK:BNZL 680.00, +26.00, +3.98%) shares rose 4.6% after its 2009 net profit rose 5% to 148.9 million pounds ($230 million) as revenue grew 11% to 4.65 billion pounds.
The distribution and outsourcing firm said cost cutting helped drive a significant improvement in operating margin during the second half of the year as it also raised its dividend by 5% to 21.55 pence a share.
Its fourth-quarter net income fell 57.6% to 25 million euros ($34 million), hit by one-off charges and impairments. Sales rose 0.5% to 2.95 billion euros. TNT said that there are early signs that the economy is improving but it remains cautious on continued recovery.
Bilfinger Berger (DE:GBF 50.94, -2.76, -5.14%) shares dropped 6.8%. On Friday, the German construction firm widened a probe into a rail line in Cologne and also said it's reviewing the Nuremberg-ICE rail project.
