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European markets wilt as corporate news disappoints

Stock markets in Europe wilted on Friday in the face of disappointing corporate news and a weaker-than-expected report on job creation in the US.

The London FTSE 100 index shed 0.15 percent to end the week at 5,423.6, while in Paris the CAC 40 fell 0.07 percent to 4,498.70. In Frankfurt the DAX gave up 0.31 percent to finish at 4,995.24.

The Euro STOXX 50 index of leading eurozone shares slipped 0.19 percent to 3,355.28.

On the currency market the euro plunged to its lowest reading against the dollar since May 15 last year on a report that average hourly earnings in the US rose 0.5 percent last month, the sharpest hike in more than two years.

The single currency fell at one point to US$1.1802 before rebounding slightly.

Wall Street shares struggled as the market tried to gauge the impact of the jobs report.

After a modestly higher opening, the Dow Jones Industrial Average swung lower in late morning and was down 0.27 percent at 10,493.86 at 4:30pm GMT.

The NASDAQ composite tech-heavy index clung to a gain of 0.05 percent at 2,161.22.

Ahead of the open, the Labor Department reported the US economy added a meager 56,000 jobs last month -- far weaker than the 100,000 expected -- suggesting a sluggish recovery following Hurricane Katrina and other storms.

Because payroll growth is seen as a key indicator of economic momentum, the market was at a loss trying to interpret the figures, analysts said.

"People wanted this job report to be more conclusive than it was," said Ed Peters, chief investment officer at Pan Agora.

"But the market doesn't really know what to make of it because the numbers are distorted by the hurricanes," he said.

In London broadcaster BSkyB fell 4.84 percent to £5.0150 after announcing that while pre-tax profit grew by almost 14.0 percent during its first quarter, data revealed that subscribers were increasingly cancelling their contracts amid competition from cable pay-TV providers such as NTL.

British Airways lost 2.47 percent to close at £3.06 on news that its pre-tax earnings were down 17.7 percent in its second quarter.

In Paris electronics giant Thomson rose 3.56 percent on reports that it could be acquired by an investment group.

Elsewhere there were declines of 0.10 percent to 399.53 on the AEX in Amsterdam, 0.62 percent to 10,412.30 on the Ibex-35 in Madrid, 0.99 percent to 33,337 on the SP/MIB in Milan and 0.16 percent to 7,199.68 on the Swiss Market Index. The BEL-20 in Brussels was stable at 3,305.89.
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