EUROPE MARKETS: European Stocks Edge Down Before Yellen Steps Onto Center Stage

By Carla Mozee, MarketWatch

Vivendi, Mediaset tussle continues

European stocks eased Friday, as investors waited to hear from Federal Reserve Chairwoman Janet Yellen for clues about what's next for U.S. interest rates.

The Stoxx Europe 600 slipped 0.1% to 341.65. Only the basic materials , oil and gas and telecommunications sectors showed modest gains.

A fall in shares of Vivendi SA (VIV.FR) was helping keep the pan-European benchmark headed toward its second daily loss in a row. The Stoxx 600 was still on pace to rise 0.4% for the week, which would come after last week's pullback of 1.7%.

Fed speak: After a week of waiting on the sidelines of the market, investors finally get to hear Yellen speak at the Fed's summit in Jackson Hole, Wyo. She's slated to appear at 3 p.m. London time, or 10 a.m. Eastern Time, and her comments will be watched for hints as to whether an interest rate hike is coming in September.

If Yellen's tone is hawkish, traders "are not going to be particularly happy that easy money is leaving town, so we may see a sell-off in the equity market and in gold as well," said Naeem Aslam, chief market analyst at ThinkMarkets, in a note.

"The possibilities of the U.S. increasing the interest rate are ... higher if you look at the global situation," he said. "We do not have the kind of storm which was previously experienced in the emerging markets and commodity prices have stabilized. This creates a perfect scenario for [Yellen] if she wants to achieve the normalization of monetary policy."

Before Yellen's speech, the euro exchanged hands at $1.1291, little changed from $1.1281 late Thursday in New York.

Vivendi tussle: In focus Friday was Vivendi SA (VIV.FR), whose shares slumped 4%. The media company's second-quarter adjusted earnings fell 3.1% to EUR187 million, missing analyst expectations. Vivendi said it's cutting EUR300 million in costs from its pay-TV unit Canal Plus.

At the same time, shares of Mediaset SpA (MS.MI) fell 2% after Vivendi, which has been seeking to amend an agreement with Mediaset (http://www.marketwatch.com/story/vivendi-plans-costs-cuts-at-tv-unit-2016-08-26) to buy its pay-TV business, said Thursday the contract could become void Sept. 30. Mediaset reiterated that the contract is binding and that it remains unwilling to change the terms of the deal.

Movers: Gemalto NV (GTO.AE) shares surged 7.2% after the SIM card maker's quarterly results came in above expectations.

Volkswagen AG (VOW.XE) picked up 1.8% after the German auto maker reached an agreement with about 650 U.S. franchise dealers (http://www.marketwatch.com/story/vw-strikes-deal-with-us-franchise-dealers-2016-08-26) affected by the company's diesel-emissions scandal. A Sept. 30 deadline was set to complete the details.

BAE Systems PLC (BA.LN) rose 2.1% as the defense company's rating was upgraded to buy from hold at Berenberg.

Indexes: Germany's DAX 30 shed 0.2% to 10,507.85. France's CAC 40 fell 0.4% to 4,391.31.

Italy's FTSE MIB fell 0.7% to 16,593.18, while Spain's IBEX 30 was off 0.1% to 8,589.80. The U.K's FTSE 100 gave up 0.1% at 6,809.83.

(END) Dow Jones Newswires

August 26, 2016 05:20 ET (09:20 GMT)

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