TY>Drug stocks put Europe winning run in jeopardy
Porsche Holding up after results; Danone signs deal to merge CIS operations
European shares traded flat on Friday, placing a recent winning streak in jeopardy, as losses mounted for major pharmaceuticals including Sanofi-Aventis and Roche.
After rising to 256.64 early in the session, the Stoxx Europe 600 index /quotes/comstock/22c!sxxp (ST:SXXP 254.40, -0.48, -0.19%) traded at 254.82, broadly unchanged from the previous close.
On Thursday, the index ended up 0.2%, having gained 6.2% over seven days to reach its highest closing level since May 13.
But eight sessions of gains looked uncertain on Friday, with drugmakers losing ground.
Sanofi-Aventis /quotes/comstock/24s!e:san (FR:SAN 48.77, -2.35, -4.59%) /quotes/comstock/13*!sny/quotes/nls/sny (SNY 31.72, -0.12, -0.38%) shares were down 4.5% and Roche Holding /quotes/comstock/06p!rog (CH:ROG 154.20, -4.70, -2.96%) /quotes/comstock/11i!rhhby (RHHBY 35.87, +0.42, +1.18%) shares fell 2.8%, GlaxoSmithKline /quotes/comstock/23s!a:gsk (UK:GSK 1,195, -20.00, -1.65%) shares lost 2% and AstraZeneca /quotes/comstock/23s!a:azn (UK:AZN 3,058, -24.50, -0.80%) shares fell 1%.
Concerns about the safety of Sanofi's Lantus medicine to treat diabetes were renewed on Friday, according to reports. The firm said that evidence over potential cancer risks has been inconclusive so far.
Of the major regional benchmarks, the German DAX index /quotes/comstock/30p!dax (DX:DAX 6,194, -30.01, -0.48%) declined 0.4% to 6,199.57, the French CAC-40 index /quotes/comstock/30t!i:px1 (FR:PX1 3,664, -19.04, -0.52%) lost 0.4% to 3,668.49 and the U.K. FTSE 100 index /quotes/comstock/23i!i:ukx (UK:UKX 5,241, -12.91, -0.25%) slipped 0.2% to 5,245.20.
Asian shares were mixed and U.S. stock futures were pointing to a retreat on Wall Street with Dow Jones Industrial Average futures down 23 points.
The euro slipped against the dollar, down 0.1% at $1.2369. Light sweet crude oil futures lost $1.11 at $75.68 a barrel, while copper futures lost 6 cent to trade at $2.85 per pound
Most oil producers were lower, with Total /quotes/comstock/24s!e:fp (FR:FP 40.06, -0.40, -0.98%) /quotes/comstock/13*!tot/quotes/nls/tot (TOT 50.15, +0.20, +0.40%) shares down 0.6%.
However, BP /quotes/comstock/23s!a:bp. (UK:BP. 372.75, +13.05, +3.63%) /quotes/comstock/13*!bp/quotes/nls/bp (BP 31.71, -0.14, -0.44%) gained 3.8% to 373 pence, paring losses since April 20 to around 42%.
BP's chief executive, Tony Hayward, told a congressional panel Thursday that it's still too early to determine the exact cause of the Deepwater Horizon rig explosion on April 20 and subsequent oil leak. Read more on BP.
Banks have risen 4.6% this week, including a 0.5% gain on Friday.
Worries about sovereign debt in Europe retreated and European Council President Herman Van Rompuy said late Thursday that stress tests on European banks will be published in July.
"The announcement of the stress tests had not been expected given strong opposition, particularly from regional banks in Germany," said strategists at Davy Stockbrokers. "The united front in Europe should help assuage fears over banks loan books and sovereign debt exposures," they added.
Societe Generale /quotes/comstock/24s!e:gle (FR:GLE 37.47, +0.34, +0.90%) shares were up 1.1% and Credit Agricole /quotes/comstock/24s!e:aca (FR:ACA 9.51, +0.20, +2.09%) shares rose 2.3%.
Spain's Banco Santander /quotes/comstock/06x!csan (ES:SAN 9.13, +0.10, +1.13%) /quotes/comstock/13*!std/quotes/nls/std (STD 11.27, +0.27, +2.45%) , up 1.9%, and BBVA /quotes/comstock/06x!cbbva (ES:BBVA 9.07, +0.20, +2.29%) /quotes/comstock/13*!bbva/quotes/nls/bbva (BBVA 10.98, +0.21, +1.95%) , up 3.1% may be rated the two healthiest banks in Europe in the tests, while analysts say Germany's unlisted landesbanks could be among the weakest. Read more on stress tests.
The Spanish Ibex 35 index rose 1% to 9,847.90.
German sportscar marker Porsche Automobil Holding /quotes/comstock/11e!fpah3 (DE:PAH3 34.92, +0.04, +0.10%) climbed 0.9%.
The firm blamed its nine-month loss on costs tied to the integration of Volkswagen and also said the merger of the two companies could be finalized by 2011.
It posted an after-tax loss of around 700 million euros ($866.7 million) for the nine months of its July 31 fiscal year. The result was hit by restructuring as well as a capital increase at Volkswagen that reduced Porsche's holding in Volkswagen to 32.2% from 37.4%.
Porsche said that its net liquidity position "improved dramatically" and it expects to report a loss of less than 1 billion euros for its fiscal year, which it said is an improvement on earlier forecasts. Read more on Porsche earnings.
Shares of French dairy firm Danone /quotes/comstock/24s!e:bn (FR:BN 44.35, +0.23, +0.51%) rose 0.4% after signing a deal to merge its fresh dairy products businesses in the CIS area with those of Russia's Unimilk.
Sarah Turner is a markets reporter for MarketWatch in London.
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