Equities investors go into the week ahead in pensive mood, assessing whether a few days of losses are based on well-founded worries about growth and interest rates or represent just a temporary pause for breath.
The flow of earnings will ease slightly but updates are still due from major companies including German carmaker DaimlerChrysler, Dutch financial services group ING and Spanish phone company Telefonica.
The FTSEurofirst 300 index of top European shares has risen by about 6 percent so far this year, reaching close to new six-year highs last week on a wave of merger and acquisition activity and strong corporate earnings.
But the market has slipped in recent days, falling more than 1 percent in the week so far amid growing concerns about rising interest rates and worries about growth. "The time has come for a bout of consolidation," said Mike Lenhoff, chief strategist and head of research at Brewin Dolphin Securities.
"The European markets have performed astonishingly well and we haven't really had any kind of backward correction since the recovery set in from the sell-off back in February and March."
By 1446 GMT, the FTSEurofirst 300 index of top European shares was up 0.22 percent at 1576.30 points, turning into positive territory after earlier falling to 1,554.07 points, its lowest level in three weeks.
Earnings will continue next week though slowing slightly, with Deutsche Postbank due to report on first quarter earnings on Monday and Deutsche Post to follow on Tuesday along with RWE.
Germany's second-largest utility, RWE, was the latest subject of merger and acquisition speculation on Friday, after a radio broadcaster reported French state-owned utility EDF was planning to buy it.
Talk of take-over and merger activity has boosted European markets in past weeks, with firms such as news and financial data provider Reuters and British music group EMI some of the latest targets in the spotlight.
But as some deals have so far failed to emerge, such as a rumoured $100 billion-plus bid by BHP Billiton for Rio Tinto, stocks have retreated as investors attempt to assess which deals are likely and which are pure speculation. On Wednesday, results are due from ING and the world's top steelmaker Arcelor Mittal.
Several telecoms firms across Europe will also give results updates, including Telefonica and Telekom Austria on Wednesday, while BT Group will lay out its full-year results on Thursday. Lenhoff said stronger than expected earnings so far this year were one of the major drivers of market gains.
"Earnings have been very good, in fact they have been a lot better than expected and I would have thought that trend is going to continue for a little while," he said.
Economic data in focus next week will include growth figures for the first quarter in Germany, France and Italy on Tuesday, which will help to give a clearer picture of eurozone economic performance, and consumer price inflation data.
The European Central Bank kept its key interest rate unchanged at 3.75 percent on Thursday but signalled that interest rates would very probably rise again in June in a pre-emptive strike against inflation.
"Interest rate concerns should have already been taken on board," said Lenhoff. "The only interest rate issue remaining is where the peak in interest rate lies, and if it is considerably above where the market currently expects that peak to lie then we are in for a nasty shock.