European stocks little changed with Spain, earnings in focus

Investing.com - European stock markets were little changed during early trade on Monday, as ongoing uncertainty surrounding Spain’s bailout plan and concerns over weakening corporate earnings weighed on appetite for riskier assets.

During European morning trade, the EURO STOXX 50 inched up 0.2%, France’s CAC 40 added 0.1%, while Germany’s DAX 30 was flat.

The European Union's closely-watched two-day summit ended Friday without major news to renew investor confidence in the region’s handling of its ongoing debt crisis.

Sentiment firmed up slightly Monday after the center-right Popular Party of Prime Minister Mariano Rajoy increased its majority in his home region of Galicia on Sunday, removing a possible obstacle to formally requesting financial aid from Spain’s euro zone partners.

Rajoy said last Friday he still had not decided whether to request a sovereign bailout, dampening hopes the debt-strapped nation was moving closer to requesting a full-scale bailout.

A bailout would allow the European Central Bank to step in and buy Spanish sovereign debt, which would result in reduced borrowing costs for the debt-strapped nation. But Spain has been reluctant to do so because it may come with conditions on its budget.

Investors also digested a fresh batch of company earnings reports. Dutch conglomerate Royal Philips Electronics saw shares rally 4.7% after it reported group sales rose 14% to EUR6.13 billion in the third quarter.

On the downside, Nexans saw shares plunge 8.2% after the world’s second- biggest maker of cables reduced its full-year revenue forecast, predicting “stable” sales compared with a previous prediction for “slight organic growth.”

Also in France, water and waste utility Veolia Environnement tumbled 4.25% after denying rumors over the weekend that a merger with Suez Environnement was on the agenda. Shares of Suez traded down 0.9%.

Elsewhere, in London, commodity-heavy FTSE 100 eased down 0.1%, as losses in oil firms weighed on the index.

Oil and gas major British Petroleum shed 0.9% after it confirmed it was in advanced discussions to sell its 50% stake in TNK-BP to OAO Rosneft. Other oil firms were also lower, with Royal Dutch Shell down 0.6% and BG Group slumping 0.65%.

In the U.S., equity markets pointed to a mildly higher open, following heavy losses suffered in the previous session. The Dow Jones Industrial Average futures pointed to a 0.3% gain, S&P 500 futures added 0.35%, while the Nasdaq 100 futures indicated a 0.55% rise.

Later in the day, investor attention turns to the earnings season in the U.S., where corporate giants Caterpillar, Texas Instruments and Yahoo report results.