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Swiss Stocks Rise After U.S. Home-Sales Data; UBS Gains

Updated on

April 24 (Bloomberg) -- Swiss stocks rose as U.S. reports showed home prices in 20 cities dropped at a slower pace in February and sales of new houses topped forecasts, outweighing Novartis AG’s biggest slump in almost two months.

Swatch Group AG, the world’s biggest watchmaker, and Cie. Financiere Richemont SA, the owner of the Cartier brand, added at least 1.5 percent as Swiss watch exports increased last month. Novartis declined 1.5 percent after first-quarter profit dropped more than estimated.

The Swiss Market Index increased 0.2 percent to 6,124.84 in Zurich. The index has rallied 3.2 percent so far this year. The broader Swiss Performance Index rose 0.3 percent today.

“The data came out mixed,” Ralf Umlauf, an analyst at Helaba Landesbank Hessen-Thueringen in Frankfurt, wrote in e-mailed comments. “Noteworthy is the fact that consumer sentiment didn’t cave in, so that a scenario of a continued economic recovery in the U.S. can’t be put in question.”

Swiss stocks tumbled the most since November yesterday as manufacturing in the euro area and China shrank, the Dutch Cabinet offered to resign and Socialist candidate Francois Hollande gained an edge in French elections. The combined volume of shares that changed hands on SMI-listed companies today was 5.5 percent more than the average of the last 30 days, data compiled by Bloomberg show.

U.S. Economy

In the U.S., a report showed that sales of new houses were stronger than projected in March, indicating cheaper borrowing costs are helping stabilize the real estate market. Purchases ran at a 328,000 annual rate, a decline of 7.1 percent from a revised 353,000 pace in February that was faster than first projected, figures from the Commerce Department showed today in Washington. Economists forecast a March rate of 319,000, according to the median estimate in a Bloomberg News survey.

Home prices in 20 U.S. cities dropped at a slower pace in February, pointing to stabilization in the real-estate market. The S&P/Case-Shiller index of property values fell 3.5 percent from a year earlier, the smallest 12-month drop since February 2011.

The Conference Board’s measure of consumer confidence decreased to 69.2 in April from a revised 69.5 the prior month. The median forecast of economists had called for a reading of 69.6. The measure reached a one-year high of 71.6 in February.

Euro-Area Debt

The Netherlands sold 2 billion euros ($2.6 billion) of bonds maturing in July 2014 and January 2037 today. The government had aimed to issue as much as 2.5 billion euros of the securities.

Spain’s Treasury sold 1.9 billion euros of bills, near a reduced target for the sale, and bonds rose on the secondary market as demand for the three-month securities doubled.

Switzerland’s exports fell in March, adding to signs the strong Swiss franc is hampering demand for its products abroad. Foreign sales, adjusted for inflation and seasonal swings, declined 2.5 percent from February, when they gained a revised 12 percent, the Federal Customs Office in Bern said today.

Swatch and Richemont added 1.5 percent to 408.50 francs and 1.8 percent to 55 francs, respectively, as Swiss watch exports increased 15 percent in March compared with the same month last year.

Austriamicrosystems AG rallied 8.8 percent to 67.45 francs, the most since Jan. 19, after the chipmaker raised its sales forecast a second time this year. The company now expects 2012 sales to increase more than 30 percent.

Novartis declined 1.5 percent to 50.15 francs for the worst performance in the SMI. The drugmaker said first-quarter profit dropped 8 percent on generic competition and manufacturing glitches at a consumer-health products factory in Nebraska.

Net income excluding some costs fell to $3.09 billion, or $1.27 a share, from $3.4 billion, or $1.41 a share, a year earlier, the Basel, Switzerland-based company said. Analysts predicted had profit of $1.28 a share, according to the average of 10 estimates compiled by Bloomberg.

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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