European Stocks Gain as Egypt’s Mubarak Resigns; Michelin Rises
Stock Chart for Cie Generale des Etablissements Michelin (ML)
European stocks rose as Egyptian President Hosni Mubarak resigned with immediate effect and consumer confidence in the U.S. rose in February, showing that the recovery in the world’s largest economy is strengthening.
Michelin & Cie. climbed 3.7 percent as the world’s second- largest tiremaker announced that full-year profit exceeded analysts’ projections. Nokia tumbled 14 percent after announcing that it will make phones for Microsoft Corp.’s mobile operating system. L’Oreal SA sank 4.2 percent after the world’s largest cosmetics maker reported profit that failed to beat analysts’ estimates.
The Stoxx Europe 600 Index gained 0.4 percent to 287.99 at the 4:30 p.m. close in London, extending its climb to 0.7 percent this week. The gauge reached the highest level since September 2008 earlier this week, pushing the measure to about 16 times the reported earnings of its companies, near the highest level in nine months, according to data compiled by Bloomberg.
“The announcement of Mubarak’s resignation is good news,” said Markus Huber, the head of German sales trading at ETX Capital in London. “It has removed some of the uncertainty in the region and has triggered a market rally, even though the transition could still take a fair amount of time.”
European stocks extended their gains as Mubarak stepped down as president of Egypt and handed power to the military, bowing to the demands of protesters who have occupied Tahrir Square in central Cairo for the past few weeks. Egyptians streamed out of Friday prayers today vowing to topple Mubarak after he yesterday defied calls to resign.
Mubarak Quits Presidency
“Mubarak has decided to relinquish the office of the presidency,” said Vice President Omar Suleiman in a statement on state television today. “He has instructed the Supreme Council of the armed forces to take over the affairs of the country.”
In the U.S., the Thomson Reuters/University of Michigan preliminary February index of consumer sentiment rose to 75.1 from 74.2 in January, in line with average economist projection of 75 in a Bloomberg News survey.
Some 74 percent of the 348 companies in the S&P 500 that have reported results since Jan. 10 topped per-share earnings projections, according to data compiled by Bloomberg. In Europe, 56 percent beat forecasts, the data show.
National benchmark indexes climbed in 12 of the 18 western European markets. The U.K.’s FTSE 100 Index increased 0.7 percent and Germany’s DAX Index added 0.4 percent, while France’s CAC 40 Index rose 0.2 percent.
Michelin jumped 3.7 percent to 59.18 euros, leading makers of autos and car parts higher in the Stoxx 600. The tiremaker reported 2010 net income of 1.05 billion euros ($1.42 billion), exceeding the average analyst estimate of 911 million euros.
Michelin also named Jean-Dominique Senard to succeed Michel Rollier as chief executive officer. Rollier, 67, will hand over the CEO post to Senard, 58, in the coming months, following a vote by shareholders at an extraordinary meeting on May 13. Senard joined Michelin in 2005 as finance chief.
Bayerische Motoren Werke AG and Daimler AG, the world’s biggest makers of luxury cars, surged 2.3 percent to 63.14 euros and 1.9 percent to 56.51 euros, respectively. Volkswagen AG, Europe’s largest carmaker, increased 2.6 percent to 128.20 euros. The company said group deliveries rose 20 percent in January on demand from China, India and Latin America.
Nokia plunged 14 percent to 7 euros, its largest decline in 18 months, after the world’s biggest maker of mobile phones announced that it will use Microsoft’s Windows Phone as its primary software platform -- a sign of the depth of the challenge in taking on Apple’s iOS and Google’s Android.
L’Oreal declined 4.2 percent to 85.72 euros after the maker of Maybelline lipstick posted 2010 net income that rose to 2.24 billion euros from 1.79 billion euros a year earlier. That missed the average profit estimate of 10 analysts surveyed by Bloomberg for 2.27 billion euros. UBS AG downgraded the shares to “neutral” from “buy,” saying the results were “slightly disappointing.”
ThyssenKrupp AG fell 2.7 percent to 30.29 euros as Germany’s largest steelmaker predicted that it will post a wider full-year loss at its Steel Americas unit than it previously forecast.
Ocado Group Plc sank 11 percent to 255 pence, the largest decline since its initial public offering last July, as John Lewis Partnership Pensions Trust sold its entire stake in the online grocer at 265 pence a share. The pension fund was Ocado’s second-biggest shareholder.
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