European Stocks Advance; Swedbank, Electrolux Rally
Thursday, 26 April 2012 | 00:00
European stocks advanced for a second day as companies from Apple Inc. to Swedbank AB and Electrolux AB reported earnings that beat estimates.
A gauge of European bank shares climbed, with Swedbank AB jumping to its highest price in almost a month. Electrolux AB, the world’s second-biggest appliance maker, rallied 6.5 percent. Temenos Group AG soared 19 percent as the Swiss banking-software maker’s first-quarter sales beat estimates and it confirmed its full-year outlook.
The benchmark Stoxx Europe 600 Index gained 1 percent to 256.96 at the close of trading. The measure has advanced 5.1 percent this year as the European Central Bank disbursed more than 1 trillion euros ($1.3 trillion) to the region’s lenders to spur the availability of credit and boost the economy.
“Strong results from Apple and other European companies are helping the market today,” said Otto Waser, chief investment officer at Research & Asset Management AG in Zurich. “We’re in an environment where market participants buy and sell depending on the newsflow, but the market still lacks a clear trend. We’ve seen stronger moves and bigger changes of direction lately, leaving some investors nervous.”
The Stoxx 600 gained 1 percent yesterday as sales of new homes in the U.S. exceeded forecasts and company earnings topped analyst estimates. The volume of shares changing hands in the gauge’s companies was 4.4 percent higher today than the average of the last 30 days, according to Bloomberg data.
In the U.S., the Federal Reserve will conclude a two-day meeting today where it will probably leave the benchmark interest rate in a range of zero to 0.25 percent, according to the median forecast of 79 economists surveyed by Bloomberg News.
The Fed will also release policy makers’ forecasts for growth, unemployment, inflation and the appropriate path of the federal funds rate over the next several years.
Orders for U.S. durable goods fell in March by the most in three years, indicating manufacturing will contribute less to growth this year.
Bookings for goods meant to last at least three years dropped 4.2 percent, the biggest decrease since January 2009, after a revised 1.9 percent gain the prior month, data from the Commerce Department showed today in Washington. Economists forecast a 1.7 percent decline, according to the median estimate in a Bloomberg News survey.
The U.K. economy unexpectedly shrank in the first quarter as construction output slumped, pushing Britain into its first double-dip recession since the 1970s.
Gross domestic product contracted 0.2 percent from the fourth quarter of 2011, when it shrank 0.3 percent, the Office for National Statistics said today in London. The median of 40 estimates in a Bloomberg News survey was for a gain of 0.1 percent. A technical recession is defined as two straight quarters of contraction.
National benchmark indexes rose in all of the 19 western European markets except Iceland. France’s CAC 40 rallied 2 percent, while Germany’s DAX advanced 1.7 percent. The U.K.’s FTSE 100 rose 0.2 percent.
Swedbank, the largest lender in the Baltic states, jumped 3.5 percent to 107.70 kronor after profit in the first quarter beat estimates as it made more money from its lending business.
Banco Bilbao Vizcaya Argentaria SA rose 2.2 percent to 5.26 euros after the Spanish lender reporter first-quarter profit of 1 billion euros, topping the average analyst estimate that called for 936.7 million euros.
BNP Paribas SA and Societe Generale SA, France’s biggest banks, rose 5.6 percent to 30.88 euros, and 6.3 percent to 18.26 euros, respectively. UniCredit SpA, the largest bank in Italy, increased 6.8 percent to 3.10 euros, while Banca Popolare di Milano Scarl rallied 9.3 percent to 35.3 euro cents.
Electrolux gained 6.5 percent to 147.20 kronor after reporting first-quarter profit of 561 million kronor ($83.3 million), compared with the 483 million-kronor average estimate in a Bloomberg survey of economists.
Temenos jumped 19 percent to 16.85 Swiss francs after the banking-software maker confirmed its full-year outlook and reported first-quarter sales of $100.3 million, beating the average $97.5 million estimate.
Barclays Plc raised the stock to overweight, the equivalent of buy, from equal weight. UBS AG upgraded the shares to buy from neutral, while Zuercher Kantonalbank AG raised the company to overweight from market weight.
Technology shares were among the best performers of the 19 industry groups in the Stoxx 600 after Apple posted a 94 percent increase in first-quarter profit.
Cap Gemini SA and Alcatel-Lucent increased 3.5 percent to 29.68 euros, and 5.2 percent to 1.47 euros, respectively.
PSA Peugeot Citroen, Europe’s second-largest carmaker, advanced 4.6 percent to 9.34 euros. First-quarter revenue of 14.3 billion euros topped the 14 billion-euro average of three estimates compiled by Bloomberg. The company said the competitive environment remained “difficult” and predicted it to last through the first half of the year.
Valeo SA, France’s second-largest car-parts maker, rallied 8.7 percent to 37.61 euros, its biggest gain since September, as Natixis raised the stock to buy from neutral.
GlaxoSmithKline Plc, the U.K.’s largest drugmaker, sank 3 percent to 1,413.5 pence after reporting first-quarter profit and sales that missed analyst estimates as revenue declined in Europe.
Earnings excluding some items were 27.3 pence a share, Glaxo said. That missed the average estimate of 29 pence from 11 analysts surveyed by Bloomberg. Sales increased 1 percent to 6.64 billion pounds ($10.7 billion), missing the average analyst estimate of 6.83 billion pounds.
Konecranes Oyj, the world’s biggest supplier of industrial cranes, climbed 7.2 percent to 22.70 euros, boosted by a record order book that rose 12.4 percent to 1.08 billion euros from a year ago.
Galp Energia SGPS SA, Portugal’s biggest oil company, jumped 4.1 percent to 11.30 euros. Amorim Energia BV, a holding company controlled by Portuguese investor Americo Amorim, plans to buy a 5 percent stake in the company from Eni SpA for 14.25 euros a share, according to a spokesman for Americo Amorim who asked not to be identified.
Nexans SA, the French maker of cables, fell 8.1 percent to 40.15 euros, its biggest drop since September. The company forecast a decline in the first-half profitability of its transmission, distribution and operators division.
ABB Ltd., the world’s biggest power-grid supplier, retreated 3.2 percent to 17.79 francs as it reported net profit of $685 million in the first quarter, short of the average $704.8 million analyst estimate.