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Bourses slip in about-face
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February 9, 1999: 9:05 a.m. ET
Early gains evaporate by midday as markets eye Dow and a firmer euro
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LONDON (CNNfn) - Europe's bourses reversed course by midday Tuesday, with early gains evaporating amid concerns of a soft start on Wall St. and apprehension that the U.S. Federal Reserve may raise interest rates in the near future.
The downturn across the continent, ranging at one point from 1 percent to about 3 percent, helped unhinge an early rally on the FTSE index of 100 leading shares, which fell 1.2 percent, or 70 points, to 5,764.9.
In Paris, the CAC-40 eased 1.82 percent to 4,078.04, while Germany's electronically traded Xetra Dax racked up the largest losses, slipping nearly 2.3 percent to 4.937.36.
Analysts attributed the about-face to a modest appreciation of the euro, which firmed slightly against the dollar to trade at $1.14. This upturn, said Ian Harnett, the chief equity strategist with BT Alex. Brown, dampened some of the enthusiasm for cyclical stocks.
"At the same time, there are worries that bond yields may be rising," Harnett said.
Bucking the European trend, shares of SmithKline Beecham (SB) extended earlier gains to trade up more than 4 percent in London after the company said it would cut 3,000 jobs, or just over 5 percent of its total global workforce of 58,000, by the end of 2002.
Earlier, the company confirmed plans to spin off its two U.S. healthcare divisions for $2 billion to focus on its core pharmaceutical business. SmithKline stock rose 33-1/2 pence to 834.
British Airways (BAY), which jumped more than 4 percent earlier after posting a third-quarter loss that still beat market expectations, was up 0.39 percent at 383 pence.
Industrial gases company BOC Group (BOC) nosed deeper into negative territory Tuesday, dragged down by financial results showing a drop in first-quarter profits to 84.9 million pounds from 93.5 million a year earlier. BOC gave up nearly 6 percent of its value to 818 pence.
In Frankfurt, BMW (FBMW) stock continued to chug along amid takeover talk following the ouster of the company's top two executives Friday. BMW shares were up 9.50 euros at 736.00 after the company reaffirmed its commitment to turning around its money-losing Rover unit in the U.K.
Separately, in an unconfirmed report, a German newspaper said Friday that the carmaker's ousted chairman, Bernd Pischetsrieder, could receive a 15 million mark ($8.63 million) severance package
DaimlerChrysler was down 2.45 euros at 83.70.
In the banking sector, Deutsche Bank (FDBK) managed to outflank its financial rivals on the Dax, edging up 0.20 euros to 49.20 after the bank's boss, Rolf Breuer, said in a TV interview that the bank's planned purchase of U.S.-based Bankers Trust would make no economic sense if it is delayed for too long.
The bank is one of several German companies facing lawsuits from Holocaust survivors who accuse the companies of participating in the Nazi-led expropriation of Jewish assets in World War II, and of using slave labor in their factories.
Dresdner Bank (FDRB) slipped 0.80 euros to 33.30 as Commerzbank eased o.30 euros to 25.70.
In Paris, bargain hunting eroded recent gains in several blue chip issues. L'Oreal dipped nearly 2 percent to 595.5, while France Telecom (PFTE) slipped 2.06 percent to 76.15 euros.
Oil producer Elf Aquitaine (PELF) eased more than 4.5 percent to 100.4 euros, as rival Total gave up nearly 3 percent to 95.10.
Among the leading gainers, pharmaceutical group Rhône-Poulenc (PRPP) added 2.14 percent to just under 44 after its U.S. subsidiary said Monday it had gained exclusive rights to compounds that may be able to treat Alzheimer's and Parkinson's diseases. 
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