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European Stocks Little Changed; Societe Generale Falls

European stocks were little changed as euro-area industrial output data rose and after U.S. President Barack Obama pledged to expand trade with the region. U.S. futures advanced, while Asian stocks were little changed.

Societe Generale SA posted the biggest decline by a lender on a gauge of banking stocks after reporting a fourth-quarter loss that missed analysts’ estimates. Heineken NV rallied to its highest in more than 23 years after the world’s third-largest brewer beat full-year profit estimates. PSA Peugeot Citroen rose after it reported a narrower operating loss than predicted.

The benchmark Stoxx Europe 600 Index declined 0.1 percent to 286.8 at 10:08 a.m. in London, after yesterday adding 0.5 percent. The gauge has advanced 2.6 percent this year as U.S. lawmakers agreed on a budget avoiding tax increases and spending cuts that had threatened to push the world’s largest economy into a recession. Standard & Poor’s 500 Index futures added 0.1 percent, and the MSCI Asia Pacific Index was little changed as markets in China and Hong Kong were closed.

“There’s a bit of a consolidation right now, but investors are still underinvested and European assets are still undervalued,” Patrick Legland, Societe Generale’s head of research, said in a Bloomberg TV interview with Francine Lacqua. “We’ve had some disappointment in European earnings, but you need to see this case by case because sometimes this is more to do with exceptional items and provisions. Their core underlying business is not great because it’s tough in Europe, but these companies are coping.”

Company Earnings

About 54 percent of the 312 western European companies that have reported earnings since Jan. 8 beat analysts’ projections for profit, according to Bloomberg data. Of the 358 that have posted sales, 51 percent exceeded forecasts.

The volume of shares changing hands in companies listed on the Stoxx 600 was 23 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.

Euro-area industrial production increased more than economists forecast in December. Factory production in the 17- nation currency bloc rose 0.7 percent from November, when it declined a revised 0.7 percent, the European Union’s statistics office in Luxembourg said today. Economists had forecast a gain of 0.2 percent, according to the median of 41 estimates in a Bloomberg News survey. December output fell 2.4 percent from the year-earlier month.

Trade Agreement

In the U.S., Obama said he would pursue a trade agreement with the EU to expand the world’s largest economic relationship, while at the same time finishing discussions for a Pacific- region accord.

Trade and investment between the U.S. and the 27 nations that make up the EU had a value of $4.5 trillion in 2011.

Sales at U.S. retailers probably grew in January as an improving job market helped consumers overcome higher payroll taxes, economists said before a report today. The projected 0.1 percent gain would follow a 0.5 percent December increase, according to the median forecast in a Bloomberg survey.

Societe Generale declined 3.6 percent to 31.50 euros. France’s second-largest bank posted a fourth-quarter loss after writing down its stake in derivatives broker Newedge Group and setting aside 300 million euros ($404 million) for legal expenses. The net loss was 476 million euros, compared with a 100 million-euro profit a year earlier, the Paris-based lender said. That was wider than the average estimate for a loss of 203 million euros in a Bloomberg survey.

ING Misses

ING Groep NV retreated 1.5 percent to 6.83 euros. The biggest Dutch financial-services company will shed 1,400 jobs in the Netherlands and 1,000 in Belgium after saying fourth-quarter profit missed estimates and its core capital ratio fell.

Net income rose to 1.43 billion euros from 1.19 billion euros a year earlier, the Amsterdam-based company said in a statement. That missed the 1.63 billion-euro median estimate of 12 analysts surveyed by Bloomberg.

Societe BIC SA plunged 8.1 percent to 89.35 euros, its largest decline in almost 16 months. The French manufacturer of pens and pencils said profit was 263.1 million euros in 2012, below the average estimate of 270.6 million euros.

Storebrand ASA dropped 9 percent to 27.06 kroner, its biggest slide in more than six months. Norway’s second-largest insurer posted profit that missed estimates and increased its guidance for reserve strengthening needed to meet new rules.

Heineken added 3.9 percent to 53.97 euros, its highest price since at least 1989. Earnings before interest and taxes, excluding some items, rose to 2.9 billion euros from 2.7 billion euros a year earlier, the maker of Amstel lager and Strongbow cider said in a statement. That beat the median estimate for profit of 2.85 billion euros.

Peugeot, Europe’s second-biggest carmaker, advanced 2.6 percent to 6.12 euros. The company posted an Ebit loss of 576 million euros for 2012, down from a profit of 1.09 billion euros a year earlier. The loss was narrower than the 647 million-euro average analyst estimate.

To contact the reporter on this story: Sofia Horta e Costa in London at shortaecosta@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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