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European markets climb
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August 21, 2001: 12:11 p.m. ET
Tech, telecom and drug stocks lead gains ahead of U.S. rate decision
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LONDON (CNN) - European markets rose Tuesday in light trading ahead of a U.S. interest rate decision. Drug and telecom stocks led gains.
London's FTSE 100 rose 1.4 percent to 5,430.3 and the blue-chip CAC 40 in Paris climbed 0.9 percent to 4,834.87, while Frankfurt's Xetra Dax reversed earlier losses, rising 0.4 percent to 5,228.58 in late trading.
The Federal Reserve is expected to cut interest rates by a quarter of a percentage point to 3.5 percent later Tuesday, but economists are divided about what the central bank's next move will be.
"A half percentage point cut would signal that the economy is on shakier ground than we expected," Goldman Sachs managing director Jerry Wattenberg told CNN.
"We are still waiting to see if the previous rate cuts are having any effect on company earnings. Until then, people will keep out of the markets," Wattenberg added. A rate cut later Tuesday would be the seventh cut this year.
In the U.S. at midday, the Dow Jones industrial average advanced 0.4 percent to 10,366.85 and the tech-laden Nasdaq composite index gained 0.5 percent to 1,891.41.
Drug makers and some technology and telecom stocks pushed markets higher.
Swiss health-care group Novartis rose 3.6 percent in Zurich after U.S. drug regulators approved its launch of cancer drug Zometa.
Investors looking for safe haven in an uncertain economic environment pushed up the prices of other European drug heavyweights, GlaxoSmithKline (GSK) gained 2.1 percent and AstraZeneca (AZN) rose 3.7 percent. French drug makers Aventis (PVAE) and Sanofi-Synthelabo (PSAN) both rose more than 2 percent.
In the telecom sector, the World's No. 1 mobile-phone operator, Vodafone Group (VOD), rebounded from a recent low to the FTSE 100 leader board, rising 3.9 percent. British Telecommunications (BT-A), the UK's second-largest phone company, rose 3.8 percent.
Energis (EGS), the UK's biggest carrier of internet traffic, surged 10.5 percent after its German unit Ision posted a 39 percent rise in first-half revenues.
Sonera threat to Telekom stock
Deutsche Telekom (FDTE), Europe's biggest phone operator by sales, fell 1.5 percent to fresh lows for the year after Finnish phone operator Sonera said it will sell its 72 million shares in DT. Sonera rose 1.6 percent in Helsinki.
Among semiconductor makers and related stocks, Europe's biggest chip designer, ARM Holdings (ARM), rose 3.2 percent; the continent's biggest microchip manufacturer, STMicroelectronics (PSTM), climbed 1.8 percent; and rival Infineon Technologies (FIFX) added 6.2 percent.
Consumer electronics maker Thomson Multimedia (PHO) of France topped the leader board in Paris, rising 4.3 percent, and Europe's biggest, Philips Electronics, added 1.5 percent.
WPP Group (WPP), the world's second-largest ad company, rose 3.9 percent after French rival Havas Advertising said it was considering its response to WPP's higher offer to take over UK media buyer Tempus. Shares in Havas (PHAV), which had agreed to buy Tempus, slipped 2.8 percent.
Also in Paris, aerospace firm EADS (PEAD) rose 4.2 percent on reports Airbus is in talks to sell up to 50 aircraft worth as much as $2.7 billion to Chinese airlines. EADS controls Airbus and owns 80 percent of it.
Financial services company MLP (FMLP) was the best performer in Frankfurt, rising 6.3 percent after four sessions of heavy losses in which it lost almost a third of its value.
SAP (FSAP), Europe's biggest software company, was up 2.4 percent.
Mail company Deutsche Post (FDPW) fell 2.8 percent after posting a 5 percent decline in first-half net profit.
In Amsterdam, the AEX index rose 1.3 percent, and the SMI in Zurich shot up 1.6 percent. Milan's MIB30 was little changed from the previous day's close.
The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, advanced 1.2 percent, with the information technology, computer, pharmaceutical and telecom sectors the main gainers, all rising more than 2 percent. 
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