(Adding full report)
PARIS (Thomson Financial) - Share prices closed higher, coming off a small decline at lunchtime, as investors reacted to morning gains on Wall Street, where enthusiasm over corporate news outweighed concerns over soaring oil prices and a sliding dollar, market sources said.
The CAC-40 index finished up 34.57 points or 0.60 pct at 5,794.87.
Among CAC-40 stocks, 23 closed higher and 17 closed lower. On the Matif, November CAC-40 futures were trading at 5,801.
On the broader indices, the SBF-80 index closed down 16.56 or 0.24 pct at 6,939.51 while the SBF-120 ended up 20.19 or 0.48 pct at 4,224.70.
The euro was at 1.4388 usd, after hitting a new record of 1.4392 in afternoon trade. The dollar has been pulled down by expectations that the Federal Reserve will cut interest rates next week, making dollar-denominated assets less attractive.
In the US, the market cheered strong results for Microsoft Corp and reassuring guidance from mortgage lender Countrywide Financial Corp.
Microsoft soared more than 10 pct in morning US trading after the software giant reported late Thursday a 23 pct increase in quarterly net profit.
Countrywide, one of the main casualties of the sub-prime crisis, also boosted sentiment by saying it expects to return to profit in the fourth quarter after suffering a third-quarter loss of more than 1 bln usd.
A Paris dealer noted that European markets have also been reassured by a mostly above-consensus quarterly numbers from blue chips, allowing them to shrug off records for oil prices and the dollar-euro parity.
'When the (corporate) numbers are there, the stock market is well,' he concluded.
Today's gains allowed the CAC-40 to wipe out losses from earlier in the week and end up 54.39 points or 0.95 pct on last Friday's close of 5,740.48.
Peugeot SA led CAC-40 risers, up 3.65 eur or 6.31 pct at 61.46, lifted by its consensus-beating quarterly sales and other goods news in the auto sector.
French peer Renault SA rose 3.56 or 3.32 pct to 110.91, helped by Nissan's higher-than-expected contribution to Renault's earnings.
A local analyst commented that, in addition to the good corporate numbers, Peugeot and Renault were boosted by French President Nicolas Sarkozy's plans to introduce an eco-tax, which should benefit the French manufacturers because they produce smaller, less polluting cars.
Vivendi SA also posted strong gains, ending up 1.10 or 3.66 pct to 31.14, helped by an upgrade to 'buy' from 'hold' at ABN Amro.
'Vivendi's valuation appears compelling (...versus the media and telecom sectors), and we see some catalysts on the horizon,' ABN analysts said in a research note, including the 'increased likelihood of balance sheet deployment'.
Investors also welcomed a report in Les Echos that Vivendi has raised its stake in Maroc Telecom to 53 pct from 51 pct.
The enthusiasm pushed up telecoms operator Neuf Cegetel, in which Vivendi has a 40 pct stake. Neuf ended up 1.32 or 4.05 pct at 33.95.
In contrast, Dexia shed 0.52 or 2.40 pct to 21.13, leading fallers on the CAC-40.
The Franco-Belgian bank was affected by renewed worries about its exposure to subprime problems through its US unit Financial Security Assurance (FSA).
Accor also gave ground, dropping 0.81 or 1.22 pct to 65.42. The Paris dealer noted that the hotel sector has fallen out of favour on the markets after enjoying big gains in the early part of this year.
EADS was another significant faller as the aeronautics group reacted to the sliding dollar. The strength of the euro against the dollar has become a serious financial burden on Airbus, which invoices its planes in dollars but a major part of its costs in euros.
EADS ended down 0.25 or 1.01 pct at 24.55.
Outside the CAC-40, TF1 saw profit-taking after publishing above-forecast third-quarter sales figures, as investors took advantage of a recent strong run on the back of government plans to liberalise broadcasting regulations.
TF1 shares closed down 0.52 or 2.60 pct at 19.49.
'The shares had a great upwards move on the deregulation story, so I think today we're just seeing a bit of profit-taking,' a London-based trader said, adding that 'the underlying fundamentals in the near term are not that easy.'
Back on the upside, SEB SA surged 7.59 or 6.05 pct to 132.99 after revealing a 41 pct jump in nine-month operating profit to 165 mln eur.
CA Cheuvreux upgraded the stock to '2 Outperform' from '3 Underperform', saying SEB's valuation is modest and the current price level 'is an excellent entry point'.
Theolia also starred among midcaps, adding 1.12 or 6.38 pct to 18.67. The group's decision to issue launch a maximum of 240 mln eur of convertible bonds has been warmly received by the market.
The renewable energy producer is also firmly in focus due to France's Grenelle Environnement summit, at which President Sarkozy yesterday pledged 1 bln eur for the 'energy and motors of the future.' tfn.paris@thomson.com gt/jlc/gt/wj COPYRIGHT Copyright Thomson Financial News Limited 2007. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.