LONDON - European stocks were mixed in midday trade Monday, with the world's largest power firm E.ON up on talk of expansion plans but Swiss Life slumped after the insurer revised its earnings downward. German drug and chemical group Bayer dropped 4.2 percent after announcing it faced 3,500 damage suits in the United States following last year's recall of its Baycol cholesterol drug.
Investors were worried that the short, sharp rally of recent weeks will run out of steam unless more fuel for optimism comes from companies or the economy.
"To give this rally legs we need a trigger; either companies must be more optimistic about the fourth quarter or we get some decent headline statistics from the U.S. economy," said Richard Champion, a European fund manager at Pavilion Asset Management in London.
By 1048 GMT, the FTSE Eurotop 300 index was up 0.8 percent at 909 points, with the narrower DJ Euro Stoxx 50 index 0.1 percent higher at 2,529 points. The Eurotop 300 has jumped about 16 percent since October 10 when the index was languishing near five-and-a-half-year lows.
However there are more hurdles ahead for investors to jump this week before they can be sure of booking gains, including a heavy agenda of corporate earnings this week. "Last week and the week before we saw a huge rebound and so people will wait and see this week as there are a lot of earnings announcements, and we will able to judge better the quality of third quarter results," said Thierry Lacraz, European strategist at Pictet & Cie bank in Geneva.
Sales figures from French carmaker Peugeot, and results from Swiss food giant Nestle, engineering firm ABB, and advertising bellwether WPP are some of the week's key reports. Volumes have been quietly climbing over recent weeks, as hedge funds have rapidly covered short positions and long-term value investors have begun dipping their toes into the market.//