European stocks mixed in choppy trade; DAX down 0.26%

Investing.com - European stocks were mixed in choppy trade on Thursday, following the release of a series of earnings reports, while concerns over the handling of the debt crisis in the euro zone continued to weigh on market sentiment.

During European morning trade, the EURO STOXX 50 added 0.11%, France’s CAC 40 rose 0.10%, while Germany’s DAX 30 fell 0.26%.

Markets were jittery after European Central Bank President Mario Draghi dampened hopes that the euro zone’s bailout fund, the European Stability Mechanism, could be given a banking license, which would increase its firepower to fight the debt crisis in the euro zone.

ECB Governing Council member Ewald Nowotny had said on Wednesday that there were some arguments in favor of such an idea.

In addition, the yield on Spanish 10-year bonds was at 7.38% on Thursday, below Wednesday’s euro-era high of 7.74%, but still above the critical 7% threshold, widely considered unsustainable in the long term.

Meanwhile, Wednesday’s disappointing U.S. housing data sparked fresh expectations that the Federal Reserve may implement fresh easing measures to shore up growth.

Financial stocks were broadly higher, as shares in France’s Societe Generale and BNP Paribas jumped 2.31% and 1.73%, while German lenders Deutsche Bank and Commerzbank rallied 1.42% and 0.88% respectively.

Peripheral lenders also contributed to gains, as shares in Spain’s Banco Santander and BBVA advanced 1.84% and 1.47%, while Italian Unicredit and Intesa Sanpaolo surged 2.28% and 1.01%.

Among earnings, France Telecom rallied 1.75% after the phone company reported a smaller-than- estimated decline in first-half revenue as price cuts helped slow customer defections.

On the downside, Telefonica dove 6.20% after the company suspended its dividend and cut a revenue forecast, citing an “extremely challenging” economic environment.

France’s largest phone-equipment supplier, Alcatel-Lucent, also slid 5.83% after announcing job cuts as part of a plan to save an additional EUR750 million.

In London, commodity-heavy FTSE 100 inched 0.01% lower, weighed by losses in energy stocks.

Oil and gas major Royal Dutch Shell led losses, with A shares tumbling 2.74% and B shares plunging 2.87%, after the company said that its second-quarter profit dropped from last year mainly due to lower energy prices. BP lost 0.72%.

Meanwhile, mining stocks were higher as Rio Tinto edged up 0.03% and BHP Billiton climbed 0.70%. Copper producers Xstrata and Kazakhmys also added to gains, with shares jumping 1.22% and 1.21% respectively.

Elsewhere, U.K. lenders tracked their European counterparts higher, as shares in Barclays rallied 1.32% and the Royal Bank of Scotland advanced 0.96%, while Lloyds Banking and HSBC Holdings gained 0.92% and 0.15% respectively.

In the U.S., equity markets pointed to a steady open. The Dow Jones Industrial Average futures pointed to a 0.02% gain, S&P 500 futures signaled a 0.01% rise, while the Nasdaq 100 futures indicated a 0.01% increase.

Also Thursday, research group Gfk said that its index of Germany’s consumer climate rose to 5.9, from 5.8 in the preceding month. Analysts had expected Gfk consumer climate to remain unchanged at 5.8 last month.

Later in the day, the U.S. was to release official data on durable goods orders and unemployment claims, followed by a report on pending home sales.