EUROPE MARKETS: Europe Stocks Wobble Ahead Of Eventful Data Week

By Sara Sjolin, MarketWatch

LONDON (MarketWatch) -- European stock markets struggled for direction on Monday, as investors were hesitant of placing any big positions ahead of potentially market-moving events later in the week, including central-bank meetings and top-tier U.S. data.

The Stoxx Europe 600 index inched 0.1% higher to close at 299.06, after swinging between gains and losses earlier in the day.

"It's an interesting thing -- markets continue to open fairly positive and then fall off daily highs. They have been struggling to push forward [in recent days] and last week there was no real data to guide the markets. It gave investors a chance to pause for breath and we're seeing a bit of that today as well," said Richard Perry, chief market strategist at Central Markets.

He added that investors probably opted to stay on sidelines ahead of a week with several event risks. The European Central Bank, the Bank of England and the U.S. Federal Open Market Committee meet during the week, with market participants closely watching for any hints of changes in monetary policy.

On Wednesday, the U.S. gross-domestic-product report is out, followed on Friday by the nonfarm-payrolls data and unemployment rate. Investors have closely been watching data out of the U.S. lately after Fed Chairman Ben Bernanke said the central bank could start reducing its $85-billion-a-month asset purchases if the economy improves as expected.

"Basically anything big that can be announced will be announced stateside this week and there's a lot of talk about how the market will be looking towards [Fed] tapering and what expectations will be after the data," Perry said.

"Bernanke has said it's all data dependent. We're looking at September as the start of tapering but anything worse than expectations could impact the timing. Bad news is good news in that sense," he added.

U.S. stocks were mostly lower on Monday, weighed by data showing pending home sales fell in June.

Europe movers

Back in Europe, Germany's DAX 30 index rose 0.2% to 8,259.03, while the U.K.'s FTSE 100 index closed 0.1% higher at 6,560.25.

France's CAC 40 index closed almost flat at 3,968.91.

Among notable movers, shares of Elan Corp. PLC (ELN) jumped 3.7% after health-care products group Perrigo Co. (PRGO) said it would buy the Irish biotech firm in a deal valued at $8.6 billion. Shares of Perrigo traded 6.2% lower in U.S. trade at the time of the European close.

Advertising firms were also in the spotlight after Publicis Groupe SA and Omnicom Group Inc. (OMC) on Sunday announced they will merge in the industry's biggest deal ever. The new firm, Publicis Omnicom Group, will have a combined market capitalization of $35.1 billion, overtaking current market leader WPP PLC .

Shares of Publicis picked up 0.1% in Paris and Omnicom gained 0.5%.

Other advertising firms also advanced as analysts predicted they would benefit from potential client conflicts at the new merged company. Goldman Sachs mentioned Havas SA , up 4.7%, and WPP, up 0.6% as rival players likely to gain from the merger. Additionally, UBS lifted WPP to buy from neutral following the announcement.

Shares of Danone climbed 3.2% after the yogurt maker confirmed its full-year targets and reported a 6.7% rise in quarterly sales.

Also on the rise, shares of Volkswagen AG picked up 1% after Berenberg initiated coverage of the car maker with a buy rating.

Shares of Essilor International SA rallied 6.2% after the contact-lenses firm said it would acquire the 49% stake in Transitions Optical Inc. it doesn't already own as part of a growth strategy. Essilor also said it would buy a 100% stake in Intercast Europe SpA.

Bucking the positive trend in Europe, Italians banks showed broad-based losses after Fitch Ratings late on Friday downgraded several of the country's mid-sized banks. Banca Popolare dell'Emilia Romagna Scarl , down 5.3%, was cut to BB+ from BBB and Banca Carige SpA , off 2.8%, was lowered to BB from BB+.

Credit Agricole SA lost 1.4% after J.P. Morgan Cazenove cut the French bank to neutral from overweight.

Barclays PLC (BCS) gave up 3.5% after speculation the bank will boost its capital levels by issuing new securities. The bank said in a statement it has been in discussions with the Prudential Regulation Authority regarding its financial and capital management plans and will update the market alongside its interim results on Tuesday.

Shares of TNT Express NV slumped 4.6% after the courier firm said it swung to a loss in the second quarter amid continuing challenging tough trading conditions in Europe.

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