European Stocks Close Little Changed; Belgacom Gains

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European Stocks Fall Before U.S. GDP Data
Visitors sit and read newspapers beyond a reflection of Ibex stock index information inside the Madrid Stock Exchange in Madrid. Photographer: Angel Navarrete/Bloomberg

European stocks closed little changed, with the Stoxx Europe 600 Index completing a weekly drop, as data showed the U.S. economy expanded more than forecast in the third quarter, offsetting concern company earnings are deteriorating.

Straumann Holding AG jumped 7.9 percent after Bank of America Corp. recommended buying the shares. Belgacom SA surged by a record 7.8 percent after raising its 2012 forecasts. Ericsson AB tumbled 3.9 percent after missing its third-quarter gross-margin target.

The Stoxx 600 rose 0.1 percent to 270.51 in London. The benchmark gauge has rallied 16 percent from this year’s low on June 4 as European Central Bank policy makers agreed on an unlimited asset-purchase program and the Federal Reserve announced a third round of quantitative easing. The Stoxx 600 still lost 1.3 percent this week as euro-area manufacturing shrank and corporate earnings weakened.

“The good news is that U.S. growth has picked up, buoyed by stronger consumer and government spending,” Nicholas Spiro, managing director of Spiro Sovereign Strategy in London, wrote in an e-mail. “The bad news is that the third-quarter data still falls woefully short of what’s needed over a number of quarters to shore up the sickly U.S. labor market. The better-than-expected U.S. GDP data should help underpin risk assets and comes at a time when business confidence remains extremely fragile.”

Economic Rebound

In the U.S., a Commerce Department report showed that the world’s biggest economy was helped by a pickup in consumer spending, a rebound in government outlays and gains in residential construction.

Gross domestic product rose at a 2 percent annual rate after climbing 1.3 percent in the prior quarter. The median forecast of 86 economists surveyed by Bloomberg called for a 1.8 percent gain.

In Europe, reports showed that French consumer sentiment dropped in October, while Spain’s unemployment rate climbed to a record in the third quarter as a deepening recession left one in four workers jobless.

National benchmark indexes advanced in ten of the 17 western-European markets that were open today. The Vienna market was closed. France’s CAC 40 climbed 0.7 percent, while the U.K.’s FTSE 100 added less than 0.1 percent. Germany’s DAX gained 0.4 percent.

Straumann jumped 7.9 percent to 118.1 Swiss francs, the biggest gain in more than five months, after Bank of America raised the world’s biggest maker of dental implants to buy from underperform.

Belgacom Dividend

Belgacom, the largest phone company in Belgium, advanced 7.8 percent to 23.14 euros, the strongest rally since it sold shares to the public in March 2004, as the company raised its 2012 forecasts and announced a special dividend.

Anglo American Plc gained 4.1 percent to 1,933.50 pence after saying Chief Executive Officer Cynthia Carroll will quit.

Ericsson dropped 3.9 percent to 58.15 kronor, the sharpest decrease since May 4. The world’s largest maker of mobile-phone networks reported a third-quarter gross margin, or the percentage of sales remaining after production costs, that slid to 30.4 percent from 35 percent, missing the average estimate of 32.2 percent.

Marine Harvest ASA plunged 5.2 percent to 4.65 kroner after predicting that its catch would fall to 350,000 tonnes in 2013 after an estimated 390,000 tonnes this year. Pareto Bank ASA said the outlook for the next year is seen to be below consensus forecasts.

Novo Declines

Novo Nordisk A/S, the world’s biggest insulin maker, fell 3.3 percent to 930 kroner after U.S. regulators disclosed that a scheduled advisory-panel meeting on the diabetes treatment Tresiba will focus on cardiovascular risks.

The company drew investors’ attention to a document that revealed topics for a previously scheduled Food and Drug Administration meeting Nov. 8 to help determine whether Tresiba should be approved for sale.

“Meta-analyses of several clinical trials suggest an excess risk for cardiovascular events with this insulin over its comparators,” the FDA wrote this month. Novo said in September it had no concern about Tresiba’s safety.

Randstad Holding NV slid 4.7 percent to 25.32 euros after Goldman Sachs Group Inc. downgraded the company’s shares to neutral from buy.

Separately, Natixis said the company’s fourth-quarter outlook remains difficult as it sees a gradual decline continuing in Europe.

Mediaset Drops

Mediaset SpA declined 3.1 percent to 1.34 euros. Former Italian Prime Minister Silvio Berlusconi was found guilty of tax fraud and sentenced to four years in prison in a film-rights case involving the television company.

Renault SA fell 1.8 percent to 34.74 euros, retreating for the sixth straight day, after third-quarter revenue plunged 13 percent to 8.45 billion euros, the carmaker said yesterday after the market close. The figure missed the 8.97 billion-euro average of nine analyst estimates compiled by Bloomberg.

Elementis Plc, the world’s largest maker of hectorite-clay additives used in cosmetics, slumped 5.6 percent to 204.90 pence, the biggest drop in 2012, after saying a temporary slowdown in shale drilling will weigh on annual profit. Full-year earnings per share may still meet analysts’ expectations because of a lower group tax charge, the company said.

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