Oil prices back below $40 a barrel and a bullish update by tech bellwether Intel may lend strength to European shares on Friday, but investors are likely to sit on their hands ahead of a key U.S. employment report. Adecco could be an early feature after reporting halved first-quarter net profit, as expected, while military contractor BAE may nab the spotlight after it agreed in a last-minute move to buy UK tank maker Alvis for 355 million pounds ($651 million). Chip makers STMicroelectronics and Infineon and chip equipment maker ASML could get a boost after industry giant Intel narrowed the range of its quarterly revenue forecast to the upper end, citing better-than-expected performance in its communication business. Oil prices will remain in focus, a day after oil cartel OPEC's two-stage package to raise crude output by as much as 2.5 million barrels a day by August 1 pushed oil prices lower as it convinced investors that Gulf producers were serious about cheaper oil.
U.S. oil has been around the $40 mark for the past three weeks, fuelled by demand growth and worries about supply security in the Middle East. But U.S. May non-farm payrolls were expected to steal the show at 1230 GMT, as the numbers are widely seen as key to determining how aggressive the Federal Reserve needs to be when it starts raising interest rates. Economists polled by have forecast a 216,000 gain in jobs, compared to 288,000 in April, but hedgers and speculators were gearing up for payrolls to beat forecasts by as much as 40,000. Financial bookmakers in London expect Britain's FTSE 100 <.FTSE> to open 13 points weaker, with Germany's DAX index <.GDAXI> opening 9 points softer and France's CAC-40 <.FCHI> starting 15 points lower. In New York on Thursday, the Nasdaq Composite Index <.IXIC> dropped 1.44 percent to 1,960.26, while the Dow Jones industrial average <.DJI> fell 0.65 percent to 10,195.91.
U.S. stock indexes had been respectively 0.6 percent lower and flat when European markets closed. The Bank of New York's index of leading European ADRs <.BKEUR>, or American Depositary Receipts, ended 0.5 percent lower.///