European Stocks Are Little Changed as Danone Rallies

European stocks closed little changed, trimming earlier gains, as companies from Danone to TNT (TNTE) Express NV reported results.

Danone, the owner of Evian bottled water and Activia yogurt, climbed 3.2 percent as sales growth topped estimates. Elan Corp. rose 3.7 percent after agreeing to be bought for $8.6 billion. TNT slumped the most in six months as the Dutch package-delivery company posted a loss. Banca Popolare di Milano Scrl led financial companies lower, retreating 5.9 percent.

The Stoxx Europe 600 Index added less than 0.1 percent to 299.06 at the close of trading, having earlier climbed as much as 0.7 percent. The gauge slipped 0.3 percent last week as earnings from BASF SE and ABB Ltd. missed estimates while a survey of purchasing managers showed euro-area manufacturing unexpectedly expanded in July for the first time in two years.

“European equity markets are still holding up well on the back of last week’s PMI numbers, which hints that growth in Europe will advance in the coming quarters,” said Mark Andersen, who helps oversee $1.7 trillion as head of asset allocation at UBS AG in Zurich. “Earnings still need to come in stronger to support equity markets.”

National benchmark indexes advanced in 10 of the 18 western-European markets today. Germany’s DAX (DAX) rose 0.2 percent, while France’s CAC 40 and the U.K.’s FTSE 100 were little changed. The volume of shares changing hands in Stoxx 600 companies was 25 percent lower than the 30-day average, according to data compiled by Bloomberg.

Monthly Advance

The Stoxx 600 has rallied 4.9 percent in July, the biggest monthly gain since October 2011, as the Federal Reserve said it remains flexible on the pace of asset purchases. Fed policy makers begin a two-day meeting tomorrow.

U.S. gross domestic product probably rose 1 percent on an annualized basis in the second quarter, after gaining 1.8 percent in the previous period, data will show on Wednesday, according to a separate survey of economists. Payrolls increased by 185,000 after a 195,000 gain in June, and the jobless rate fell to 7.5 percent from 7.6 percent, according to the median forecast of economists before Labor Department data on Friday.

Danone (BN) rose 3.2 percent to 59.27 euros. Second-quarter revenue growth topped analyst estimates as the company sold more baby-nutrition products in China and dairy sales climbed more than forecast.

Elan Deal

Elan increased 3.7 percent to 11.55 euros after the Irish drug company agreed to be bought by Perrigo Co., a U.S. maker of over-the-counter medicines.

Royal KPN NV (KPN) rallied 4.6 percent to 1.98 euros. Billionaire Carlos Slim’s America Movil SAB ended an agreement with KPN that capped the Mexican company’s stake in the Dutch phone carrier at about 30 percent. If America Movil raises its stake above that threshold, it would have to bid for all of KPN’s shares, according to Dutch law.

Essilor International SA (EI) climbed 6.2 percent to 85.62 euros as the world’s biggest maker of eyeglass lenses agreed to buy full control of its Transitions Optical venture from PPG Industries Inc. for $1.73 billion to strengthen its tinted-products line.

TNT declined 4.6 percent to 5.86 euros, the largest drop since January. The company reported a second-quarter loss of 304 million euros ($403 million), after a profit of 39 million euros last year.

Banks Drop

A gauge of banks in the benchmark Stoxx 600 posted the biggest retreat among 19 industry groups. Popolare di Milano, Italy’s oldest cooperative bank, dropped 5.9 percent to 36.9 euro cents and Banca Monte dei Paschi di Siena SpA lost 4.6 percent to 21 cents.

Barclays Plc (BARC) fell 3.5 percent to 309.05 pence as Britain’s second-largest bank by assets considers selling shares or contingent convertible bonds.

The London-based lender favors issuing cheaper CoCos instead of new stock to boost capital, according to two people with knowledge of the talks who asked not to be identified because no decision has been reached. The bank said it has held talks with the Prudential Regulation Authority and will update the market when it reports earnings tomorrow.

Ryanair Holdings Plc (RYA), Europe’s biggest discount airline, slipped 2.8 percent to 6.97 euros as first-quarter earnings dropped 21 percent on higher fuel costs and an early Easter travel season.

Publicis Groupe SA (PUB) closed little changed, after earlier surging as much as 6.6 percent to a 13-year high. The Paris-based firm and Omnicom Group Inc. agreed to merge in an all-stock transaction to create the word’s largest advertising company, with $23 billion in revenue.

Havas SA, a rival French ad firm, rallied 4.7 percent to 5.66 euros, the highest price in 11 years.

To contact the reporter on this story: Corinne Gretler in Zurich at cgretler1@bloomberg.net

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

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