UKX FTSE 100 Index

By Carla Mozee, MarketWatch

Stoxx Europe 600 on track for February gain of nearly 3%

European stocks sought firm direction Tuesday, with earlier gains clipped as investors prepared to hear from U.S. President Donald Trump about his plans to boost growth in the world's largest economy.

The Stoxx Europe 600 eased back by less than 1 point at 369.042, giving up an early rise of 0.3%. Losses were led by the basic materials, telecom and technology sectors, but industrial and health care stocks were advancing.

The pan-European benchmark on Monday shed 0.1%. But it remained on course to close up February with a 2.6% rise, and that would mark the third monthly advance in four months.

Trump will give a key address (http://www.marketwatch.com/story/trump-says-budget-will-call-for-historic-increase-in-defense-spending-2017-02-27-101035557) before a joint session of Congress in Washington starting around 9 p.m. Eastern Time, or 2 a.m. London time on Tuesday.

On Monday, Trump said he would have a "big statement" on infrastructure spending and that his first budget proposal would include a "historic increase (http://www.marketwatch.com/story/trump-says-budget-will-call-for-historic-increase-in-defense-spending-2017-02-27-101035557)" in military spending.

"This has green-lit some decent gains from the relevant companies," including London-listed shares of weapons maker BAE Systems PLC (BA.LN) , said Connor Campbell, financial analyst at Spreadex, in a note.

Shares of aerospace and defense group Meggitt PLC (MGGT.LN) jumped 10%, topping the Stoxx 600 as the company also planned to raise its dividend (http://www.marketwatch.com/story/meggitt-hikes-dividend-despite-fall-in-2016-profit-2017-02-28). Thales SA (HO.FR) tacked on 1.1% as French defense-electronics company said it expects profitability to rise this year on higher military spending globally (http://www.marketwatch.com/story/thales-profit-rises-sees-rise-in-defense-spending-2017-02-28).

"Now Trump has to deliver on slightly more complicated matters, namely health-care and tax reforms," Campbell said. "Failure to do so could plant some further seeds of doubt in those indices sent to highs" since his election in November.

Read:How analysts say you should trade Trump's speech to Congress (http://www.marketwatch.com/story/heres-how-analysts-say-you-should-trade-trumps-speech-to-congress-2017-02-24)

And: How the U.S. stock market has reacted to State of the Union speeches (http://www.marketwatch.com/story/how-the-stock-market-has-reacted-to-state-of-the-union-speeches-2017-02-27)

Indexes: France's CAC 40 was flat at 4,845.45. The U.K.'s FTSE 100 was fractionally higher at 7,256.33. Germany's DAX 30 was off 0.1% at 11,810.25.

Economic data: French consumer spending rose 0.6% January, led by a jump in household spending on heating.

(END) Dow Jones Newswires

February 28, 2017 05:27 ET (10:27 GMT)

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