Monday 15th Nov: Technology helps bourses extend gains

Europe’s bourses extended their 28-month highs when exchanges opened on Monday after Wall Street’s Friday gains. Oil falling below $47 a barrel countered worries over the stubbornly weak dollar.
A barrel of benchmark US crude was 62c lower at 46.70, a six-week low while the euro skirted its all-time high in Asian trade touching $1.2998, though it eased to $1.2959.
The FTSE Eurofirst 300 rose 0.5 per cent to 1,039.27 with Frankfurt’s Xetra Dax up 0.4 per cent to 4,160.04, the Paris CAC-40 0.4 er cent up at 3,848.87 and the FTSE 100 in London adding 0.3 per cent to 4,810.2.
Wall Street started the week with broad expectations of profit-taking that never materialised, so it settled on moving higher with increasingly bold steps that gave the bulls hope and the bears reason to quibble.
By the close on Friday the Dow Jones Industrial Average was 0.7 per cent higher at 10,539.01 while the S&P 500 index put on 0.9 per cent to 1,184.17. The Nasdaq Composite added 1.2 per cent to 2,085.34.
For the week, the Dow put on 1.4 per cent while the S&P 500 advanced 1.5 per cent and the Nasdaq gained 2.3 per cent. Most of the gains came on Thursday and Friday as traders used falling crude futures to push the Nasdaq to nine-month highs and the S&P 500 to its best close in more than three years. The Dow and the S&P 500 tacked on their third consecutive week of gains while the Nasdaq Composite concluded a fourth one.
The leading sector was steel with its sole constituent Arcelor, rising 2.1 per cent to €16.43. The Luxembourg-based steel maker more than doubled its third-quarter core earnings to €1.098bn euros, helped by strong steel prices and merger benefits.
Technology is powering ahead as Infineon, the German chip maker, leads the gainers, up 2.5 per cent to €8.78, Ericsson, the Swedish telecoms company, up 2.2 per cent to €23. Helping sentiment was an well received initial public offering n Asia. Elpida Memory, Japan’s only large-scale memory chip maker, climbed on its first day of trading in Tokyo.
The only falling sector was the defensive tobacco, with Imperial down 0.5 per cent to £13.09.
Sanpaolo and UniCredito fell. The two Italian banks were again linked speculatively last week as the former poached Peitro Modiano as managing director from its rival where he headed corporate banking. A merger of the two is seen by some as an opportunity to create a national champion able to compete on the European stage.
Sanpaolo, Italy’s third largest bank, slipped on Monday though because its third quarter earnings of €266m, released after Friday’s close, were below expectations of €279m. Merrill Lynch cut its 2005 earnings per share target by 4.4 per cent to €0.86. UniCreddito was downgraded to “equal-weight” from “overweight” by Morgan Stanley after the bank’s third quarter net profit, released on Friday, rose 1.3 per cent to €455m. This was 4 per cent below the broker’s expectations. Merrill Lynch though reiterated its “buy” rating and viewed the numbers as in line with its expectations. Saopaulo fell 0.6 per cent to €10.66 and UniCredito dropped 1 per cent to €4.25.
Elan, the Irish drug group, rose 3 per cent to €23.49. Dresdner Kleinwort Wasserstein upgraded rival Serono to “add” from “hold” with a SFr794 price target. The broker said Elan’s multiple sclerosis therapy, Antegren, jointly developed with Biogen of the US, would launch in 2005 and could achieve sales of $2bn by 2009. Serono's Rebif though would hold up well with sales rising to $1.2bn by then.