European shares were flat yesterday as strong gains in German utility giant E.ON were countered by a slide in handset leader Nokia before the Finnish group's results today.
Oil stocks such as BP and Royal Dutch/Shell were strong on the back of crude oil prices that were kept well above $30 a barrel due to US oil inventories at 28 year lows amid a freeze on the East Coast.
Despite generally good earnings from US and European firms, dealers said much of the anticipated good corporate news had already been priced into shares.
Prices traded in a narrow range as investors appeared reluctant to push bourses higher as stocks hover around 16 month highs after their prolonged advance.
"On the one hand it was astonishing it recovered once again, so there is still some money out there that wants to come into the market," said Udo Becker, a dealer at Merck Finck private bank in Munich.
The betting is for some sort of consolidation, but timing remains unclear as the US earnings season remains in full swing with good figures yesterday from Lucent Technologies, one of the world's biggest makers of telecommunications equipment, and from J.P. Morgan Chase bank.
"From the chart point of view, we should see something like a consolidation, but even if the markets are overbought, it does not necessarily mean it comes right away," Mr Becker said.
However, investors were showing an appetite for less risky parts of the market such as E.ON, Mr Becker added.
By 1511 GMT, the FTSE Eurotop 300 index was flat at 988 points, with advancing and declining issues roughly matched in average volume.
The narrower DJ Euro Stoxx 50 index was also flat at 2,858 points.
On Wall Street, the Dow Jones industrial average was off 0.2 per cent at 10.503 points, while the tech-laden Nasdaq Composite dropped one per cent to 2,125 points.
Wall Street has hit two- to 2-1/2 year highs in recent sessions and, like Europe, is seen as ripe for some consolidation.
The DJ European utility index hit its best level since September 2002, although it is barely up for the year as most fresh investor cash has so far gone into technology, telecoms, media and financials.
E.ON and rival RWE both rose over four per cent on hopes the government will not allow European Union plans to cut carbon dioxide emissions to hurt the countries' lignite-fuelled generators.
J.P. Morgan issued a bullish note on utilities, saying they should not be ignored as they will be relatively immune to rises in interest rates or the falling dollar.