European Stocks Little Changed as U.S. Data Offsets Reid
European stocks were little changed as U.S. jobless-benefit claims dropped and home sales climbed to a two-year high, offsetting Senate Majority Leader Harry Reid’s comments that a budget deal is unlikely.
Clariant AG, a Swiss chemical company, rose 3 percent after selling three units. Bankia SA (BKIA) plummeted 20 percent as Spain’s bank-rescue fund said its parent company has a negative value of 10.4 billion euros ($13.8 billion).
The Stoxx Europe 600 Index (SXXP) increased less than 0.1 percent to 280.6 at the close of trading. The volume of shares traded was 25 percent less than the 30-day average, according to data compiled by Bloomberg. The gauge has rallied 15 percent in 2012 as the European Central Bank introduced an unlimited bond-buying program, putting it on course for the best year since 2009.
The Stoxx 600 erased an earlier gain of 0.3 percent as Reid, a Democrat, said “nothing’s happening” in U.S. budget talks and it looks like the nation is heading over the so-called fiscal cliff. A resolution to the dispute before Jan. 1 appears unlikely because Republicans won’t cooperate, he said on the Senate floor.
“We have to get some commitment from U.S. politicians that we will get at least temporary relief,” said Pierre Mouton, who helps oversee $6 billion as portfolio manager at Notz Stucki & Cie. in Geneva. “Still, the economic numbers are very encouraging.”
National benchmark indexes climbed in 13 of the 18 western European markets. France’s CAC 40 (CAC) rallied 0.6 percent, Germany’s DAX advanced 0.3 percent and the U.K.’s benchmark FTSE 100 was little changed.
President Barack Obama is pressing for U.S. lawmakers to craft an interim deal to avert more than $600 billion in tax increases and spending cuts, known as the fiscal cliff. Republican House leaders hold a conference call with their rank- and-file members today to discuss the path forward, according to a leadership aide who asked for anonymity.
In a letter to Congress yesterday aimed at intensifying pressure on lawmakers to reach a deal, Treasury Secretary Timothy Geithner said the federal debt limit will be reached on Dec. 31 and his department will begin using “extraordinary measures” to finance $200 billion in deficits into early 2013.
A Labor Department report showed fewer Americans than forecast filed claims for unemployment insurance last week. Applications for jobless benefits decreased by 12,000 to 350,000 in the week ended Dec. 22. Economists forecast 360,000, according to the median estimate in a Bloomberg survey.
U.S. new-home sales climbed to a 377,000 annual rate in November, most since April 2010, the Commerce Department said. The median forecast of economists surveyed by Bloomberg had projected 380,000.
Clariant rose 3 percent to 12.20 Swiss francs after selling units for 502 million francs ($550 million). The specialty chemicals maker said it will get approximately 460 million francs in cash for selling the textile chemicals, paper specialties and emulsions businesses to SK Capital Partners, a U.S. buyout company.
“Positive surprise today -- earlier than expected divestment, better price, low probability of writedowns,” Patrick Rafaisz, an analyst at Vontobel Holding AG, wrote in a report on Clariant. (CLN) “Despite short-term economic headwinds, today’s level represents a clear buying opportunity from a risk- reward perspective.”
Evraz Plc (EVR) added 2 percent to 259.4 pence as the steel manufacturer won antitrust approval to increase its stake in OAO Raspadskaya, a Russian coal producer.
A gauge of mining shares on the Stoxx 600 advanced 0.7 percent. Rio Tinto Group and BHP Billiton Ltd. (BHP) rose 0.9 percent to 3,541.5 pence and 0.8 percent to 2,156.5 pence, respectively.
Volkswagen AG (VOW)’s preferred shares climbed 0.9 percent to 172.60 euros after the automaker’s Audi unit said it will spend 13 billion euros on new-car development and production expansion.
Bayerische Motoren Werke AG (BMW) gained 1.1 percent to 73.46 euros. Chief Financial Officer Friedrich Eichiner said he is confident the carmaker has surpassed its 2011 profit total, according to a report by Die Welt.
Assa Abloy AB (ASSAB) advanced 1.9 percent to 244.80 kronor after agreeing to buy American docking-systems company 4Front Engineered Solutions Inc. for an undisclosed amount. The Carrollton, Texas-based company expects a revenue of $165 million in 2012, Assa said in a statement.
Bankia tumbled 20 percent to 55.2 euro cents, the lowest price since July 17. Banco Financiero y de Ahorros, the parent of Bankia, has negative value of 10.4 billion euros, Spain’s bank-rescue fund said, as it pledged to recapitalize all the lenders it controls by year-end.
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