By Sarah Turner
European stocks closed little changed Tuesday as weakness in oil prices boosted transport and auto shares, but the banking sector remained under pressure in the wake of disappointing results reported by Swiss banking giant UBS.
The Swiss SMI stock market index dropped 0.9% at 8,569.72, as UBS shares slipped 5.5% after the company said third-quarter profit fell 21% to 2.20 billion Swiss francs ($1.76 billion), coming in below analyst forecasts, largely due to a weaker performance from its trading operations.
Shares of peer Credit Suisse Group declined 1.3% ahead of its own financial results on Thursday.
The French CAC-40 index closed down 0.25% at 5,348.73, as lower shares of drug giant Sanofi-Aventis served to keep the benchmark in check.
Sanofi-Aventis shares weakened 2.8% after the company reported a 4% drop in quarterly sales and didn't make mention of when the Acomplia weight-loss drug will be launched in the U.S. market.
Germany's DAX Xetra 30 index gained 0.17% at 6,268.92, the U.K.'s FTSE 100 index added 0.04% at 6,129.20 and the pan-European Dow Jones Stoxx 600 index finished virtually unchanged at 353.34.
Some index strength came as continued weakness in oil prices boosted airline and auto stocks. Light sweet crude traded down 54 cents at $57.82 a barrel, well below recent highs.
Air France-KLM rose 1.9%, while cruise operator Carnival /zigman2/quotes/210414141/delayed UK:CCL +1.65% climbed 0.5%.
Auto gainers included DaimlerChrysler, up 3.1% at €44.67, along with Renault, up 1.2%, and Fiat, up 1.2%.
DaimlerChrysler shares rose after the car maker said it expects to take a lower charge relating to the job cuts at its luxury Mercedes division.
The shares could also have been higher amid short coverage after a German press report said that the fair value of the company could be €55 a share, according to Alexander Neuberger, an auto analyst at CA Cheuvreux.
Insurance stocks were also stronger after Britain's Friends Provident produced forecast-beating quarterly new business results.
Friends Provident shares rose 6.7%.
U.S. stocks opened higher Tuesday as investors focused on an earning season that remains on track to outperform Wall Street expectations.
Profitability is also high for European companies, said Robert Parkes, part of the equity strategy team at HSBC, and, when taken together with low valuations and a pick-up in M&A activity, is helping to support the European equity market.
"We like financials, we like technology and we like defensive growth stocks such as telecoms and pharmaceuticals," he said.
In other earnings-related news, shares of KPN dipped 2%, giving ground after the Dutch telecom group registered gains last week. It reported a 4% profit rise and lifted its earnings outlook for the year.
Swedish mobile-phone operator TeliaSonera gained 3.3% in London after it said third-quarter net profit rose 31.6% to 5.75 billion Swedish kronor ($791 million), as net sales for the period rose 4.2% to 22.23 billion Swedish kronor.
Also in Scandinavia, Finnish forestry company UPM Kymmene Corp. said third-quarter net profit rose to 147 million euros, or 0.28 euro a share, from 111 million euros, or 0.21 euro a share.
Shares of UPM Kymmene added 0.3% in Helsinki.
Away from earnings, Arcelor Mittal saw its shares gain 2% in Paris. The company is temporarily slowing European flat-steel production as inventories have been rising in the market and as demand stabilizes.
Rounding out the European action, Heidelberger Druckmaschinen rose 1.2% after the cement company said it intends to buy back up to 5% of its share capital, or 4.2 million shares, by January 2008.
Turning to broker action, STMicroelectronics gained 2% in Paris after it was upgraded to buy from hold at WestLB.
Write to Sarah Turner at firstname.lastname@example.org
Dow Jones Newswires contributed to this article.