European Stocks Are Little Changed; Alcatel Climbs

European Stock-Index Futures Fluctuate Amid U.S. Budget Debate
A sign sits outside the main entrance of the London Stock Exchange Group Plc's headquarters in London, U.K. Photographer: Jason Alden/Bloomberg

European stocks closed little changed, paring an earlier advance, as U.S. lawmakers continued to debate plans to address the so-called fiscal cliff.

Alcatel-Lucent SA rose 2.6 percent after the company was said to be closer to obtaining financing of at least 1 billion euros ($1.3 billion). TUI Travel Plc gained 3.4 percent after Europe’s largest tour operator reported earnings that topped analyst estimates. United Internet AG tumbled 8.3 percent as Warburg Pincus LLC offered its 5.5 percent stake for sale.

The Stoxx Europe 600 Index increased less than 0.1 percent to 276.24 at the close, having earlier climbed as much as 0.4 percent. The gauge has rallied 18 percent from this year’s low on June 4, boosted by central-bank measures to support growth. The Reserve Bank of Australia today cut its benchmark interest rate for the sixth time in 14 months.

“We still anticipate a deal will be done to avoid the cliff,” Daniel Morris, global market strategist at JPMorgan Asset Management in London, said on Bloomberg Television. “We may go a bit over the fiscal cliff and scramble back up again but ultimately the impact, especially on the real economy, will not be significant. If you see equities sell off because of worries about the cliff, you should see that as a buying opportunity.”

National benchmark indexes gained in 11 of the 18 western European markets. France’s CAC 40 advanced 0.4 percent, while Germany’s DAX and the U.K.’s FTSE 100 closed little changed.

Budget Talks

President Barack Obama’s administration rejected a Republican plan for tackling the fiscal cliff as it didn’t include higher tax rates for top-earning Americans, something the president has called essential. House Speaker John Boehner proposed $1.4 trillion in spending cuts and $800 billion in new revenue by limiting tax breaks and capping deductions.

With the Republican blueprint, both parties now have their opening offers on the table. Obama’s proposed framework calls for $1.6 trillion in tax increases, $350 billion in cuts in health programs, $250 billion from other programs and $800 billion in assumed savings from the wind-down of the wars in Iraq and Afghanistan, according to administration officials.

Boehner’s proposal to generate new revenue “will destroy American jobs” and Republicans should oppose it, Senator Jim DeMint of South Carolina, co-founder of the Senate’s anti-tax Tea Party caucus, said today.

Finance chiefs from the European Union’s 27 nations met in Brussels today to discuss setting up a common bank supervisor as part of a wider crisis-fighting plan. French Finance Minister Pierre Moscovici told reporters yesterday he is “confident” Greece will pull off a successful bond buyback.

Greek Debt

European governments are counting on the buyback as a market-based way of cutting Greece’s debt, paving the way for continued aid payments. Finance ministers set a Dec. 13 meeting to release the next 34.4 billion euros for Greece.

Alcatel-Lucent added 2.6 percent to 88.3 euro cents after people familiar with the talks said the French phone-equipment maker is closer to obtaining financing from at least three banks as it attempts a turnaround.

TUI Travel climbed 3.4 percent to 278.1 pence after the tour operator reported full-year underlying pretax profit of 390 million pounds ($626 million), beating the average analyst estimate of 357.9 million pounds, according to Bloomberg data. The company also increased its final dividend by 4 percent.

Elekta AB rallied 6 percent to 101.60 kronor after the Swedish maker of radiation-surgery equipment reported second-quarter net income of 258 million kroner ($39 million) and sales of 2.49 billion kroner, topping analyst estimates.

United Internet

United Internet retreated 8.3 percent to 15.90 euros, the biggest drop in more than two years, as UBS AG placed 11.9 million shares in the German phone company on behalf of Warburg Pincus, the third-largest shareholder. UBS offered the stake at 16 euros to 16.50 euros apiece, according to terms of the deal obtained by Bloomberg News.

Electricite de France SA declined 2.3 percent to 13.97 euros after the biggest nuclear-reactor operator raised the cost estimate of developing the EPR plant in Normandy by 42 percent to 8.5 billion euros.

Neopost SA lost 5.7 percent to 38.23 euros after the French supplier of mail-room equipment lowered its annual sales-growth forecast to about 2 percent. That compares to a previous estimate of 2 percent to 4 percent. The company also cut its operating margin forecast to “slightly under 25 percent” from

25.5 percent.

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