Europe stocks advance
Sunday, 19 July 2009
LONDON, July 18 (Bloomberg): European stocks advanced, extending the Dow Jones Stoxx 600 Index's biggest weekly rally since November, as Sandvik AB announced better-than-forecast earnings and US housing starts increased.
Sandvik, the world's largest maker of metal-cutting tools, surged 7.1 per cent in Stockholm after reporting an operating loss that was smaller than the company predicted last month. Accor SA slumped 7.5 per cent as Europe's biggest hotelier said sales slipped. Novartis AG advanced 1.4 per cent after JPMorgan Chase & Co. recommended Europe's second-largest drugmaker.
The Stoxx 600 added 0.4 per cent to 210.67, the highest level since June 12. The gauge has climbed 6.8 per cent this week as companies from Goldman Sachs Group Inc. to Intel Corp. and Johnson & Johnson reported profit that beat estimates.
"Earnings are moving in the right direction," said Emmanuel Soupre, who helps manage about $18 billion at Neuflize OBC in Paris. "We're satisfied with the positive elements we have today, but we take it a day at a time. Minimal elements of a rebound exist for the end of the year."
Per-share profits have slipped 27 per cent for the 38 companies in the Standard & Poor's 500 Index that have posted second-quarter earnings. That compares with a 32 per cent slide in the first quarter and a 56 per cent slump in the final quarter of 2008.
Housing starts in the US unexpectedly rose in June as construction of single-family dwellings jumped by the most since 2004, signaling the market is stabilizing even as unemployment worsens. The 3.6 per cent increase brought starts to an annual rate of 582,000, the highest level since November, the Commerce Department said today in Washington.
National benchmark indexes climbed in all of the 18 western European markets except Austria, Luxembourg and Iceland. The U.K.'s FTSE 100 and France's CAC 40 added 0.6 per cent. Germany's DAX increased 0.4 per cent.
UBS AG strategists Nick Nelson and Matthew Gilman raised their year-end forecast for region's FTSEurofirst 300 Index to 1,000 from 900 today, citing an improvement in earnings and economic indicators. The gauge closed at 870.56 today.
Sandvik added 7.1 per cent to 64.50 kronor. The company posted a second-quarter operating loss of 2 billion kronor ($260 million) on falling orders and one-time costs. In June, it predicted a loss of 2.2 billion kronor to 2.5 billion kronor.
Accor sank 7.5 per cent to 26.32 euros. The hotel operator said second-quarter sales slipped 9 per cent to 1.79 billion euros ($2.5 billion) as the global economic decline led companies to cut business travel and tourists to trim budgets.
Novartis advanced 1.4 per cent to 45.70 Swiss francs. The drugmaker was raised to "overweight" from "neutral" at JPMorgan.
Cap Gemini SA, Europe's largest computer-services company, added 3.2 per cent to 28.54 euros after International Business Machines Corp.'s earnings topped estimates. The world's biggest computer-services provider said net income rose 12 per cent in the quarter. For the year, earnings will be at least $9.70 a share, a 50-cent increase from its previous forecast.
IBM was the second US technology bellwether this week to post forecasts that beat estimates, following Intel on July 14, indicating they are coping with the worst economic slump in five decades. Still, Google Inc., owner of the most popular search engine, tempered the outlook for the technology industry by reporting slowing sales in the second quarter.
Sandvik, the world's largest maker of metal-cutting tools, surged 7.1 per cent in Stockholm after reporting an operating loss that was smaller than the company predicted last month. Accor SA slumped 7.5 per cent as Europe's biggest hotelier said sales slipped. Novartis AG advanced 1.4 per cent after JPMorgan Chase & Co. recommended Europe's second-largest drugmaker.
The Stoxx 600 added 0.4 per cent to 210.67, the highest level since June 12. The gauge has climbed 6.8 per cent this week as companies from Goldman Sachs Group Inc. to Intel Corp. and Johnson & Johnson reported profit that beat estimates.
"Earnings are moving in the right direction," said Emmanuel Soupre, who helps manage about $18 billion at Neuflize OBC in Paris. "We're satisfied with the positive elements we have today, but we take it a day at a time. Minimal elements of a rebound exist for the end of the year."
Per-share profits have slipped 27 per cent for the 38 companies in the Standard & Poor's 500 Index that have posted second-quarter earnings. That compares with a 32 per cent slide in the first quarter and a 56 per cent slump in the final quarter of 2008.
Housing starts in the US unexpectedly rose in June as construction of single-family dwellings jumped by the most since 2004, signaling the market is stabilizing even as unemployment worsens. The 3.6 per cent increase brought starts to an annual rate of 582,000, the highest level since November, the Commerce Department said today in Washington.
National benchmark indexes climbed in all of the 18 western European markets except Austria, Luxembourg and Iceland. The U.K.'s FTSE 100 and France's CAC 40 added 0.6 per cent. Germany's DAX increased 0.4 per cent.
UBS AG strategists Nick Nelson and Matthew Gilman raised their year-end forecast for region's FTSEurofirst 300 Index to 1,000 from 900 today, citing an improvement in earnings and economic indicators. The gauge closed at 870.56 today.
Sandvik added 7.1 per cent to 64.50 kronor. The company posted a second-quarter operating loss of 2 billion kronor ($260 million) on falling orders and one-time costs. In June, it predicted a loss of 2.2 billion kronor to 2.5 billion kronor.
Accor sank 7.5 per cent to 26.32 euros. The hotel operator said second-quarter sales slipped 9 per cent to 1.79 billion euros ($2.5 billion) as the global economic decline led companies to cut business travel and tourists to trim budgets.
Novartis advanced 1.4 per cent to 45.70 Swiss francs. The drugmaker was raised to "overweight" from "neutral" at JPMorgan.
Cap Gemini SA, Europe's largest computer-services company, added 3.2 per cent to 28.54 euros after International Business Machines Corp.'s earnings topped estimates. The world's biggest computer-services provider said net income rose 12 per cent in the quarter. For the year, earnings will be at least $9.70 a share, a 50-cent increase from its previous forecast.
IBM was the second US technology bellwether this week to post forecasts that beat estimates, following Intel on July 14, indicating they are coping with the worst economic slump in five decades. Still, Google Inc., owner of the most popular search engine, tempered the outlook for the technology industry by reporting slowing sales in the second quarter.