European stocks climbed for a third day, extending the benchmark Stoxx Europe 600 Index’s second weekly advance, as investors awaited the monthly U.S. jobs report. Asian shares rose, while U.S. index futures fluctuated.
Saipem SpA (SPM) rose 1.9 percent after JPMorgan Chase & Co. recommended buying the shares of the oilfield-services contractor. Vallourec SA (VK) sank 3.5 percent after saying second- half gross operating profit will be similar to the first half.
The Stoxx 600 gained 0.7 percent to 231.8 at 9:00 a.m. in London as the benchmark measure headed for a weekly rally of 2.5 percent amid speculation policy makers will reach agreement to shield banks from the crisis and as the Bank of England expanded its bond-purchase program. The gauge has still retreated 20 percent since this year’s high on Feb. 17 and is trading at about 9.8 times its companies’ estimated earnings, near the lowest since March 2009.
“It’s not overall positive but also not as negative as some investors think,” said Markus Steinbeis, head of equity portfolio management at the Unterfoehring, Germany-based unit of Pioneer Investments KGmbH, which oversees about $221 billion globally. “There are signs policy makers are aware of problems and taking action so it should help stabilize the market. I’m quite positive in the medium term. I don’t think the market will be heavily shocked by jobs data today.”
The MSCI Asia Pacific Index jumped 2.1 percent, while Standard & Poor’s 500 Index futures rose 0.1 percent.
Central Bank Loans
The European Central Bank said yesterday it will reintroduce yearlong loans, giving banks access to unlimited cash through January 2013. The central bank will also resume purchases of covered bonds to encourage lending. At the same time, the European Commission is pushing for a coordinated capital injection into banks and German Chancellor Angela Merkel said policy makers “shouldn’t hesitate” if it turns out financial institutions are undercapitalized.
A report today may show that U.S. payrolls increased at too slow a pace in September to bring down the unemployment rate. Employment climbed by 55,000 workers after no change in August, according to the median forecast of 91 economists surveyed by Bloomberg News. The jobless rate held at 9.1 percent for a third consecutive month, according to the projections.
Saipem, Nokia Rise
Saipem increased 1.9 percent to 26.45 euros after JPMorgan raised its recommendation on Europe’s largest oilfield-services contractor to “overweight” from “neutral.”
Nokia Oyj (NOK1V) rose 2.2 percent to 4.43 euros as Samsung Electronics Co., the world’s second-largest maker of mobile phones, posted operating profit in the three months ended September of 4.2 trillion won ($3.6 billion), more than the 3.7 trillion won average of 28 analysts’ estimates compiled by Bloomberg.
Axel Springer AG (SPR) climbed 1.8 percent to 26.82 euros. The German media company’s possible bid to buy WAZ Media Group’s stake in Kronen Zeitung newspaper could be blocked by the Dichand family, which owns half of Kronen Zeitung, Handelsblatt said.
Vallourec sank 3.5 percent to 42.46 euros for the biggest decline on the Stoxx 600 after saying that second-half gross operating profit will be similar to that of the first half, held back by caution among distributors in non-energy markets and the movement of the Brazilian real against the euro. Vallourec had predicted that gross operating profit would increase slightly in the second half versus the first.
RBS, Lloyds Slip
Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc slid 1.7 percent to 24 pence and 2.8 percent to 34.9 pence, respectively. Moody’s Investors Service cut the senior debt and deposit ratings of 12 U.K. financial institutions, concluding the government will be less likely to provide support for them if they became financially troubled.
Lloyds TSB Bank Plc and Co-Operative Bank Plc had their ratings lowered one step by Moody’s, while RBS Plc and Nationwide Building Society were cut two levels.
Smiths Group Plc (SMIN) lost 1.7 percent to 933.5 pence after the world’s biggest maker of airport-security scanners was downgraded to “reduce” from “neutral” at Nomura Holdings Inc.
Premier Foods Plc (PFD) slumped 30 percent to 6.97 pence, its largest drop and its lowest price on record. The U.K.’s biggest food manufacturer said third-quarter results were “significantly below our expectations.” Total sales for the group fell 3.6 percent to 477 million pounds ($741 million) and the full-year results will miss analysts’ estimates.
Veolia Environnement SA (VIE) dropped 2.5 percent to 10.64 euros after the world’s biggest water company was downgraded to “sell” from “neutral” at UBS AG.
To contact the reporter on this story: Julie Cruz in Frankfurt at firstname.lastname@example.org