European stocks retreated on Thursday after fourth-quarter results from US bank Merrill Lynch soured sentiment in equity markets.
US futures turned negative following Merrill's announcement that it took $11.5bn in writedowns on credit and subprime exposure and reported a much worse than expected quarterly loss.
Shortly after midday in London the FTSE Eurofirst 300 was up 0.3 per cent to 1,387.02, having earlier raced above 1,400.
Frankfurt's Xetra Dax remained 0.3 per cent higher at 7,496.78, the CAC 40 in Paris gained 0.4 per cent to 5,244.31 but London's FTSE 100 fell fractionally to 5,943.6 after earlier regaining the 6,000 level.
Novartis, the Swiss drugmaker, missed market forecasts with its fourth-quarter profit due to higher research and development costs and restructuring charges. Even though the company announced a SFr10bn share buyback, the shares fell 3.1 per cent to SFr59.35.
"The numbers were complicated by one-off charges, but still missed on an underlying basis and uncertainty remains about recovery," said Alexandra Hauber at Bear Stearns.
French engineering group Alstom was higher after reporting better-than-expected third-quarter sales, up 20 per cent, and confirming its forecasts for its full financial year.
The company, which builds power stations and railways, said the third quarter included new orders of EU4.7bn for its Power Systems division. The shares rose 5.5 per cent to EU135.65.
Retailers received some welcome cheer after Dutch supermarkets group Super De Boer said consumer spending was strong over Christmas and that it had seen no signs of a consumer slowdown. The company reported a 4 per cent rise in like-for-like sales in its fourth quarter.
Super De Boer rose 7.4 per cent to EU2.90, while larger domestic rival Ahold climbed 4.9 per cent to EU8.18.
Belgian supermarket operator Delhaize, which makes most of its revenues in the US, climbed 3.2 per cent to EU51.01 after its drop in fourth-quarter sales was no worse than expected. Like-for-like, the group reported 3.7 per cent sales growth in the US, and 1.3 per cent in Belgium.
Technology stocks bounced after Wednesday's losses, with Infineon (NYSE:IFX), the German chipmaker, recovering after US rival Intel reported quarterly profits that lagged expectations. Infineon climbed 6.5 per cent to EU6.86, Franco-Italian rival STMicroelectronics (NYSE:STM) rose 3.2 per cent to EU8.44 and Dutch chip manufacturing equipment maker ASML (NASDAQ:ASML) gained 2.9 per cent to EU17.69.
Alcatel (NYSE:ALA)-Lucent, the telecoms equipment maker, rose 5.8 per cent to EU4.78 after it said it had won a Brazilian network services contract.
The banking sector remained higher despite Merrill's results. UBS (NYSE:UBS), the Swiss bank, rose 1.8 per cent to SFr47.60 after it announced domestic rival Credit Suisse (NYSE:CSR) now held 3.275 per cent of its voting rights. Credit Suisse rose 2 per cent to SFr60.60.
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