** EU WRAP **

** EUROPEAN MARKETS **
S&P future 0,04%; Bund future 0%; Crude future 72,76; €/$ 1,28585; Gold 717,55

** IN PLAY TODAY **

- Arcelor SA said first-quarter profit dropped 20 percent as costs increased and
steel prices fell from a record. Demand and prices are now improving, the
company said. Net income fell to 761 million euros ($978 million), or 1.23
euros a share, from 949 million euros, or 1.55 euros, a year earlier, the
Luxembourg-based company said in a statement today. It was expected to report
profit of 723 million euros, based on the median estimate of seven analysts
surveyed by Bloomberg News. Sales rose 17 percent to 9.57 billion euros.

- Telefonica SA, Europe’s third-biggest phone company, said profit jumped 40
percent in the first quarter as the purchases of Britain’s O2 Plc and Cesky
Telecom AS in the Czech Republic spurred growth.Net income rose to 1.27 billion
euros ($1.63 billion) from 912.2 million euros a year earlier, the Madrid-based
company said in a regulatory filing. Earnings per share increased 44 percent to
26.8 euro cents after the company canceled shares. Sales climbed 45 percent to
12 billion euros.

- InBev NV, the brewer of Stella Artois and Beck’s, said first-quarter profit
more than doubled as the company expanded in emerging markets such as Brazil.
Net income climbed to 166 million euros ($213.5 million) from 58 million euros,
a year earlier, the Leuven, Belgium-based company said today in an e-mailed
statement. Sales rose 23 percent to 2.79 billion euros as volumes increased 5.9
percent to 50.1 million hectoliters.

- Siemens AG, Europe’s largest engineering company, said contracts for
high-speed wireless network technology and trains will help sales in China
expand twice as fast as the country’s economy this fiscal year.

- Allianz AG, Europe’s biggest insurer, said capital market gains lifted
earnings at its life insurance and banking divisions, bolstering first-quarter
profit. Earnings at Dresdner Bank, bought by Allianz for $21 billion
in 2001, rose 15 percent, the Munich-based company said today.
Profit from life insurance increased 41 percent. Allianz said
first-quarter net income rose 34 percent to 1.78 billion euros
($2.29 billion) after providing preliminary figures on May 2.

- ThyssenKrupp AG Friday said second quarter net profit fell by nearly 59%
compared to the same period last year, but raised its fiscal 2006 sales and
earnings outlook. The Duesseldorf-based company said it now expects pretax
profit excluding major non-recurring effects to exceed EUR2 billion and sales to
be around EUR44 billion. Previously the company was aiming for pre-items pretax
profit of EUR1.5 billion and around EUR43 billion in sales.

- Pirelli said yesterday as markets were closing that first-quarter profit
climbed 7.5 percent to 74.8 million euros, helped by cost cuts at the tire
division.

- Other notable earnings reports today: Mitall Steel, ENI and Iberia.

** UPS & DOWNS **
+ RIO TINTO PRICE EST. RAISED 16% TO 4,400P AT MORGAN STANLEY
+ XSTRATA PRICE EST. RAISED 19% TO 3,100P AT MORGAN STANLEY
+ HOLCIM PRICE ESTIMATE RAISED 6.2% TO SF120 AT JPMORGAN
+ PERNOD RICARD RAISED TO `BUY’ FROM `HOLD’ AT ING
+ BHP BILLITON PRICE EST. RAISED 28% TO 1,600P AT MORGAN STANLEY

- DEUTSCHE TELEKOM PRICE EST. CUT TO EU16.5 VS EU17.1 AT UBS
- HOCHTIEF LOWERED TO `NEUTRAL’ FROM `BUY’ AT UBS
- VASTNED CUT TO `NEUTRAL’ FROM `OVERWEIGHT’ AT JPMORGAN
- CIBA PRICE ESTIMATE CUT TO SF69 FROM SF74 AT CREDIT SUISSE