European stocks advanced this week as companies from Royal Dutch Shell Plc to Deutsche Bank AG reported earnings that topped estimates, American jobs data beat forecasts and U.S markets reopened after Hurricane Sandy forced their closure for two days.
UBS AG, Switzerland’s biggest bank, jumped to a 15-month high after saying it will cut about 10,000 jobs to boost profitability. Shell, Europe’s biggest oil company, and Deutsche Bank AG, Germany’s largest lender, advanced more than 3 percent. Air France-KLM Group and Deutsche Lufthansa AG surged after posting earnings that beat analyst estimates. BG Group Plc tumbled 18 percent after it said growth next year will be flat.
The Stoxx Europe 600 Index added 1.6 percent to 274.85 this week. The benchmark completed its fifth monthly rally on Wednesday and has surged 18 percent from this year’s low on June 4 as European Central Bank President Mario Draghi pledged to defend the euro at all costs and Federal Reserve Chairman Ben S. Bernanke announced a third round of quantitative easing.
“The non-farm payroll figures confirm a U.S. private sector that is printing jobs year-on-year at the same pace as back in 2004-05, which is good.” Peter Garnry, an equity strategist at Saxo Bank A/S in Copenhagen wrote in a message. “The job report was better than expected, which adds to the other good reports this week, and it will likely carry the momentum for the week all the way home to show solid gains in stocks across the board.”
Hiring in the U.S. increased more than forecast in October as employers looked past slowing global growth and political gridlock at home.
In the last jobs report before next week’s presidential election, a net 171,000 workers were added to payrolls after a 148,000 gain in September that was more than first estimated, Labor Department figures showed Friday in Washington.
Data from the department also showed fewer Americans than forecast filed first-time claims for unemployment insurance last week. Applications for jobless benefits fell 9,000 to 363,000 in the week ended Oct. 27, the fewest in three weeks, the official report on Nov. 1 showed. Economists had forecast 370,000. Data for New Jersey and the District of Columbia were estimated because those offices were closed due to Hurricane Sandy, a spokesman said.
Consumer confidence in the U.S. climbed in October to the highest in more than four years. The Conference Board’s index increased to 72.2, the highest since February 2008, from a revised 68.4 in September, figures from the New York-based private research group showed Nov. 1. The reading was projected to rise to 73, according to the median estimate of economists.
Another report on Nov. 1 showed manufacturing in the world’s largest economy expanded at a faster pace than forecast. The Institute for Supply Management’s factory index climbed to 51.7 last month from 51.5 in September. A reading of 50 is the dividing line between expansion and contraction.
China’s manufacturing expanded for the first time in three months in October as output and new orders climbed. The Purchasing Managers’ Index climbed to 50.2 last month October from 49.8 in September, the National Bureau of Statistics and China Federation of Logistics and Purchasing said Nov. 1.
National benchmark indexes advanced in 15 of 18 western European markets. Germany’s DAX Index rose 1.8 percent, France’s CAC 40 climbed 1.7 percent and the U.K.’s FTSE 100 added 1.1 percent.
European markets pared gains after euro-area governments pressed Greece to make deeper spending cuts to keep aid flowing. With Greece pleading for a 31 billion-euro ($40 billion) aid payout in November and facing a sixth year of recession in 2013, euro finance ministers said on a conference call Wednesday that unfreezing loans for the country required more efforts in Athens to rein in the budget deficit and deregulate the economy.
Greek stocks fell the most in more than five months as coalition lawmakers squabbled over austerity that a Bundesbank official warned must be enforced to keep bailout funds flowing, and the government unveiled debt forecasts falling further behind its targets.
The country’s benchmark ASE Index dropped 8.3 percent this week. National Bank of Greece SA, the Mediterranean nation’s largest lender, slid 25 percent.
UBS rose 18 percent, for the biggest gain on the Stoxx 600 this week. Switzerland’s largest bank will cut about 10,000 jobs and retreat from capital-intensive trading as part of a plan to save about 3.4 billion Swiss francs ($3.6 billion) in additional annual costs by the end of 2015.
Deutsche Bank gained 5.8 percent as Germany’s largest lender said net income climbed to 747 million euros in the three months through September. That beat all seven analyst estimates compiled by Bloomberg and the 563.9 million-euro average.
Banco Bilbao Vizcaya Argentaria SA added 3.5 percent even as Spain’s second-biggest bank said third-quarter profit fell 82 percent as it continued to purge soured real estate assets.
Royal Dutch Shell rose 3.6 percent. Europe’s biggest oil company reported third-quarter profit expanded 2.3 percent after it generated increased earnings from liquefied natural gas.
Net income rose to $7.14 billion from $6.98 billion a year earlier. Excluding one-time items and inventory changes, profit was $6.6 billion, beating the $6.3 billion average estimate of 13 analysts surveyed by Bloomberg.
BP advanced 3.2 percent after Europe’s second-largest oil company raised its dividend as third-quarter profit beat analysts’ estimates. Net income climbed to $5.4 billion from $5 billion a year earlier. It raised the dividend by 12.5 percent to 9 cents a share.
Air France-KLM and Lufthansa surged 16 percent and 13 percent, respectively. Europe’s two biggest airlines posted earnings that beat analyst estimates as they began to reap the benefits of moves to eliminate thousands of jobs.
Air France-KLM said third-quarter operating profit jumped 27 percent to 506 million euros, beating analyst estimates of 434 million euros. Lufthansa reported earnings of 648 million, compared with a 522 million-euro analyst forecast.
A gauge of carmakers on the Stoxx 600 rose 3.8 percent this week after companies reported U.S. sales for October.
Bayerische Motoren Werke AG climbed 6.6 percent as U.S. sales of the largest manufacturer of luxury cars rose 21 percent, narrowing the lead of Daimler AG’s Mercedes-Benz in luxury-auto deliveries this year.
Volkswagen AG, Europe’s largest carmaker, jumped 6 percent. Sales of Volkswagen’s Audi brand in the U.S. rose 15 percent last month to 11,708.
A gauge of health-care stocks suffered the biggest weekly decline of the 19 industry groups in the Stoxx Europe 600 Index.
Fresenius Medical Care AG slid 9.2 percent after the world’s biggest provider of kidney dialysis reported third-quarter profit that missed analyst estimates as growth slowed outside the U.S.
Fresenius Medical Care’s third-quarter earnings before interest and taxes rose 6 percent to $568 million, missing the $594 million estimate of analysts surveyed by Bloomberg.
BG Group tumbled 18 percent, the biggest drop since it sold shares to the public in 1988. The U.K.’s third-largest natural-gas producer forecast a 3 percent gain in full-year production growth this year and said 2013 output growth will be flat.
Danske Bank A/S slid 7 percent as Denmark’s largest lender unveiled plans to cut 3,000 jobs and sell 7 billion kroner ($1.2 billion) in shares as it seeks to increase its core tier 1 capital ratio to more than 13 percent by the end of next year.
The measures were announced together with Danske’s third-quarter report, showing net income of 1.31 billion kroner, compared with a loss of 384 million kroner a year earlier. That was in line with the average 1.34 billion-krone estimate of 17 analysts surveyed by Bloomberg.