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New York Markets After Hours

Oct. 4, 2006, 1:06 p.m. EDT

Shares Rise on Dow's Record High

By Sarah Turner

A rally in shares of Vodafone Group, climbing bank stocks and seven-month lows for oil compensated Wednesday for another profit warning and a share-price tumble at Airbus owner EADS, lifting broader European markets.

The U.K. FTSE 100 index closed up 0.5% at 5,966, paced by a rally in Vodafone (LON:UK:VOD) after a well-received investor presentation and share strength from banks, including Bradford & Bingley, Barclays and Lloyds TSB.

They helped compensate for declines in the oil and metals sectors, with shares of the world's largest miner, BHP Billiton, sliding 4.8% on the $20 drop in gold futures on Tuesday.

Elsewhere in Europe, the German DAX Xetra 30 index increased 0.9% to 6,046, and the pan-European Dow Jones Stoxx 600 index rose 0.7% at 342.77.

France's CAC-40 index added 0.7% to 5,256, advancing even as shares of EADS lost 4.2%. The European Aeronautic Defence & Space Group and Airbus parent said late Tuesday it will push back the A380 super-jumbo jet's already-delayed delivery schedule by up to another year, a move that tears into the company's projected earnings and raises the threat of canceled orders.

Shares of two stakeholders in EADS were mixed. Lagardere shares declined 1.8%, but DaimlerChrysler shares rose 1.2%, helped by a narrower-than-expected 2.3% monthly fall in U.S. auto sales and Tuesday's sharp decline in oil prices.

With crude futures trading around $58 a barrel, travel-related stocks, including British Airways and cruise operator Carnival (LON:UK:CCL) , advanced, while energy producers including Royal Dutch Shell (LON:UK:RDSA) were mostly lower.

Shares of BP turned around to finish up 0.3% after reaching their lowest level since June 2005 in earlier trading. BP said third-quarter production would dip slightly from a hurricane-impacted quarter last year to 3.8 million barrels a day and reported declining gas-and-power trading and refining margins.

Vodafone shares gained 4.1% after Tuesday's investor presentation on Italy and Spain. "We viewed [Vodafone's comments about] Italy as upbeat.... Spain presentation reinforced our view that competitive and regulatory issues could make 2007 challenging," said analysts from Bear Stearns.

Barclays (LON:UK:BARC) shares rose 1.9% after a report in the French newspaper La Tribune said Citigroup (NYS:C) has hired a law firm to study a bid for a European bank and identified Barclays as one of four targets. ABN Amro also helped Barclays, reiterating a "buy" rating and raising its earnings targets.

Halifax reported a 1% rise in monthly U.K. house prices, which was better than forecast. Shares of HBOS, the parent company of Halifax, rose 2.3%.

Other European banks also advanced, with UBS shares up 1.5% and Deutsche Bank's stock trading up 2%.

Some recovery in the technology segment from Tuesday's weakness also helped the French and German markets to stay positive, with chipmaker Infineon Technologies a standout, up 3.1% after Goldman Sachs upgraded its rating on the stock to "buy" from "neutral."

Shares of truck maker Man AG tumbled 7.5% after Volkswagen bought more than a 15% stake in the company, but said it wasn't interested in a full takeover. Volkswagen rose 1.3%.

Shares of French catering company Sodexho rose 1.3% after saying its fiscal-year organic revenue climbed 6.4% and fiscal 2006 operating profit should meet or slightly exceed a 6% growth target. Sodexho's catering clients include the U.S. Marine Corps.

Also in the food sector, shares of Tate & Lyle (LON:UK:TATE) rose 6.1% after Merrill Lynch upgraded it to "buy" from "neutral," citing capacity expansion at artificial sweetener Splenda and expected U.S. pricing power.

Write to Sarah Turner at sarah.turner@dowjones.com

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