Volcker Rule Approved by All Five U.S. Regulators
European Stocks Rise for Seventh Day on U.S. Retail Sales; Lufthansa Gains
European stocks climbed for a seventh day, their longest winning streak in almost six months, as better-than-forecast retail sales in the U.S. offset declines in basic-resource shares and carmakers.
Air France-KLM Group and Deutsche Lufthansa AG rose as Credit Suisse Group AG upgraded the airlines. ProSiebenSat.1 Media AG lost 5.7 percent as Die Welt reported that the owners of Germany’s biggest private broadcaster may sell the company in 2011. Outokumpu Oyj sank 5.4 percent after saying the fourth quarter will be weaker than previously forecast. European carmakers posted the worst performance among 19 industry groups.
The benchmark Stoxx Europe 600 Index advanced 0.2 percent to 277.65 at the 4:30 p.m. close in London, having earlier declined as much as 0.3 percent. The gauge has rallied for seven days to the highest level in more than two years as China refrained from raising interest rates even as inflation in the world’s second-largest economy surged.
“It’s very quiet as investors have positioned themselves already,” Matthias Jasper, head of equities at WGZ Bank AG in Dusseldorf, said. “Investors are not ready to take additional risk for now. Equities are still more attractive than other asset classes and strategically one has to be overweight equities next year.”
Federal Reserve officials will probably make no change to the size of the stimulus when they meet today in Washington for the last time this year, according to 38 of 39 analysts in a Bloomberg survey on Dec. 7-8. Fed Chairman Ben S. Bernanke, in an interview broadcast on Dec. 5, told CBS Corp.’s “60 Minutes” that the recovery may not be self-sustaining and more purchases of debt beyond the $600 billion approved by the central bank through June are “certainly possible.”
U.S. Retail Sales
Sales at U.S. retailers rose more than forecast in November as holiday shopping got under way, a report showed today. Purchases increased 0.8 percent, following a 1.7 percent gain in October that was larger than previously estimated, Commerce Department figures showed. The median forecast of economists surveyed by Bloomberg News called for a 0.6 percent increase.
German investor confidence improved for a second month in December as the recovery in Europe’s largest economy showed signs of broadening. The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations increased to 4.3 from 1.8 in November. Economists predicted a gain to 3.9, according to the median of 36 forecasts in a Bloomberg News survey.
U.K. House Prices
A housing-market gauge in the U.K. stayed close to its lowest level in 18 months in November as demand for homes waned, the Royal Institution of Chartered Surveyors said.
Belgium had the outlook on its debt rating lowered to negative from stable at Standard & Poor’s Ratings Services because the country’s political stalemate makes it vulnerable to rising borrowing costs.
Analyst estimates compiled by Bloomberg show annual profit growth in Europe will average 46 percent in 2010 and 2011, more than at any time in the previous seven years. The earnings yield for Stoxx 600 companies, or profit as a proportion of the share price, is 6.53 percent, data compiled by Bloomberg show. That’s 3.6 percentage points more than the yield on 10-year German government bonds.
“We will see a continuation of earnings growth in 2011,” Ian Scott, a London-based strategist at Nomura Holdings Inc., said at a conference in Frankfurt today. “The corporate sector is very profitable yet the market isn’t paying for it.”
National benchmark indexes climbed in 11 of the 18 western European markets. France’s CAC 40 Index increased 0.3 percent. The U.K.’s FTSE 100 Index gained 0.5 percent, while Germany’s DAX Index slipped less than 0.1 percent.
Air France, Lufthansa
Mediaset SpA, the broadcaster owned by Silvio Berlusconi, surged 3.3 percent to 4.64 euros after the Italian Prime Minister survived a confidence vote as rebel lawmakers failed to muster enough support to topple his government.
TUI AG rallied 5.1 percent to 9.83 euros as the German owner of Europe’s largest travel company said profit at Hapag- Lloyd boosted its full-year operating result. Hapag contributed 150 million euros ($200.9 million) to net income compared with a loss of 174 million euros a year earlier, Hanover, Germany-based TUI said today.
BP Plc gained 3.2 percent to 473.1 pence as the international oil company sold fields in Pakistan to Hong Kong- based investment group United Energy Group Ltd. as part of its plan to pay for the Gulf of Mexico oil spill.
Vestas Wind Systems A/S rose 4.7 percent to 181.90 kroner. The company won an order for 30 turbines of its V52-850 kilowatt model for a project in Cape Verde, the company said.
Vilmorin & Cie. gained 3.3 percent to 85.75 euros after Europe’s second-biggest seed company was raised to “outperform” from “underperform” at CA Cheuvreux.
ProSiebenSat slumped 5.7 percent to 21.68 euros for the largest decline in the Stoxx 600 after Die Welt newspaper reported that Kohlberg Kravis Roberts & Co. and Permira LLP aim to sell the broadcaster next year. Die Welt cited unidentified people in the financial markets.
Outokumpu declined 5.4 percent to 13.10 euros after the Finnish stainless-steel maker forecast that fourth-quarter operating profit will be “clearly negative” rather than close to breakeven, the company said.
Basic-resource shares posted the second-worst performance among 19 industry groups in the Stoxx 600, dropping 0.7 percent. ThyssenKrupp AG, Germany’s largest steelmaker, slid 1.5 percent to 31.16 euros, while Acerinox SA retreated 1 percent to 11.83 euros.
German carmakers paced declines by a measure of European automobile makers. Volkswagen AG, Europe’s largest carmaker, lost 1.9 percent to 128.90 euros. Bayerische Motoren Werke AG and Daimler AG, the world’s biggest makers of luxury cars, fell 1.5 percent to 62.47 euros and 1.2 percent to 54.11 euros, respectively.
Allied Irish Banks Plc dropped 4.6 percent to 43.9 euro cents, erasing yesterday’s advance. The Dublin-based lender, which is being bailed out by the government, decided not to pay bonuses to some employees in its markets unit following a letter it received from Finance Minister Brian Lenihan.
Meetic SA, the operator of a dating website, tumbled 13 percent to 16.87 euros after founder and Chief Executive Officer Marc Simoncini abandoned his plans to sell the company. Separately, the shares were cut to “underperform” from “outperform” at Cheuvreux.
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