European Stocks Little Changed as Autos Offset Jobless
European stocks were little changed after a rally in automakers helped offset a drop in euro-area confidence and a report that showed more Americans than forecast filed for jobless benefits last week.
Volkswagen AG (VOW) rallied 8.7 percent after reporting a jump in operating profit. Porsche SE climbed 7.4 percent. Rhoen Klinikum AG (RHK) surged 44 percent after receiving a 3.1 billion euros ($4.1 billion) takeover offer. Deutsche Bank AG (DBK) and Banco Santander SA (SAN) paced financial shares lower.
The Stoxx Europe 600 Index climbed 0.1 percent to 257.2 at the close in London, after swinging between gains and losses today. The gauge has advanced 5.2 percent this year as the European Central Bank disbursed more than 1 trillion euros to the region’s lenders to spur credit and boost the economy.
“After the euphoria of the ECB capital injection, we’ve come back to reality,” said Matthieu Giuliani, who helps manage $4 billion at Paris-based Banque Palatine SA. “Economic statistics will continue to be difficult considering countries’ deficits and the fact that they aren’t attacking the problem. Growth in the macroeconomy won’t be found soon.”
National benchmark indexes declined in 12 of the 18 western European markets. France’s CAC 40 Index fell 0.1 percent while the U.K.’s FTSE 100 (UKX) and Germany’s DAX both climbed 0.5 percent. The volume of shares changing hands in Stoxx 600 companies was 1.5 percent higher today than the average of the last 30 days, according to Bloomberg data.
An index of executive and consumer sentiment in the 17- nation euro area fell to 92.8 this month from a revised 94.5 in March, the European Commission said today. Economists had forecast a drop to 94.2 from a previously reported 94.4, according to the median estimate in a Bloomberg News survey.
More Americans than forecast filed applications for unemployment benefits last week, a sign that the labor market is taking time to improve.
Jobless claims fell by 1,000 to 388,000 in the week ended April 21 from a revised 389,000 the prior period that was the highest since early January, Labor Department figures showed today in Washington. The median forecast of 48 economists surveyed by Bloomberg News called for a drop to 375,000.
Fed Chairman Ben S. Bernanke signaled that further Fed stimulus is unlikely unless the economy unexpectedly deteriorates. With inflation close to the Fed’s goal of 2 percent, it would be “reckless” to pursue policies that would drive up prices faster while offering “perhaps doubtful gains” to the economy, Bernanke said. Still, central bankers “remain prepared to do more” if conditions worsen, he said.
Signs of Improvement
The U.S. labor and housing markets have shown signs of improvement, and growth will “pick up gradually” after remaining “moderate,” the Federal Open Market Committee said yesterday in Washington, repeating a plan to keep borrowing costs low until at least late 2014. Fed officials also upgraded their projections for economic growth, inflation and the unemployment rate for this year.
Volkswagen preferred shares jumped 8.7 percent to 137.2 euros after the world’s second-largest carmaker reported a 10 percent jump in first-quarter operating profit to 3.21 billion euros, on higher earnings at the Audi luxury brand. That surpassed the 2.66 billion-euro average analyst estimate in Bloomberg survey.
Porsche increased 7.4 percent to 44.68 euros, while Daimler AG increased 3.2 percent to 42.66 euros. Volvo AB (VOLVB) also advanced 2.6 percent to 92 kronor after the world’s second-largest truckmaker reported first-quarter profit that beat analyst estimates.
Automobile shares climbed 2.7 percent for the biggest increase among the Stoxx 600 industry groups.
Rhoen Klinikum soared 44 percent to 21.25 euros as Fresenius SE offered to buy the German hospital operator for 22.50 euros a share, 52 percent above yesterday’s closing price.
Deutsche Bank declined 2.8 percent to 33.20 euros after Germany’s biggest lender said first-quarter profit fell 33 percent to 1.38 billion euros as a rebound in investment-banking earnings from the previous three months wasn’t enough to match year-earlier levels. That missed the 1.56 billion-euro average estimate of nine analysts surveyed by Bloomberg.
Bank shares dropped 1.1 percent for the biggest decline among the 19 industry groups in the Stoxx 600. Italy’s borrowing costs jumped at the sale of 8.5 billion euros of six-month bills as renewed concern about the spread of the region’s debt crisis forced the Treasury to offer higher rates to attract investors.
Banco Santander, Spain’s biggest lender, lost 3.4 percent to 4.75 euros. Unicredit SpA fell 2.8 percent to 3.01 euros in Milan. Societe Generale SA (GLE), France’s second-largest bank, declined 3.5 percent to 17.62 euros.
Alcatel-Lucent (ALU) tumbled 17 percent to 1.23 euros after France’s biggest telecommunications equipment supplier reported a first-quarter operating loss of 221 million euros, as revenue trailed analysts’ estimates on lower spending by European customers.
AstraZeneca Plc (AZN) sank 6.1 percent to 2,666.5, the most since December, 2010 as the U.K.’s second-largest drugmaker cut its 2012 core earnings-per-share target to $5.85 to $6.15, from a previous range of $6 to $6.30. Core EPS in 2011 was $7.28, the company said in February.
Chief Executive Officer David Brennan will also retire from his post, ending a six-year tenure.
Mobistar SA (MOBB) declined 14 percent to 29.35 euros. The Belgian phone company maintained its full-year forecasts after reporting first-quarter profit that missed analyst estimates. Net income in the three months through March fell 28 percent to 38.2 million euros. Analysts projected profit of 46.6 million euros, the median of six estimates compiled by Bloomberg.
Logitech (LOGN) International SA soared 17 percent to 8.28 Swiss francs. The world’s biggest maker of computer mice reported earnings that beat estimates and announced measures including job cuts to save about $80 million a year.
Vivendi SA (VIV) rallied 4 percent to 13.87 euros. The company is considering an overhaul of its structure that may lead to a breakup of the owner of the world’s largest music and video-game companies, according to people with knowledge of the matter. A Vivendi spokesman said there has been no decision on a review of corporate structure.
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