May 3 (Bloomberg) -- European stocks advanced to the highest level since June 2008 as a report showed U.S. employment in April picked up more than forecast and the jobless rate unexpectedly dropped to a four-year low.
Adidas AG rose to the highest price since it sold shares to the public in 1995 after first-quarter profit topped analysts’ estimates. Vallourec SA, a producer of steel pipes for the oil and gas industry, soared 12 percent. Royal Bank of Scotland Group Plc fell the most in two months as first-quarter operating profit missed forecasts. Hugo Boss AG lost 6.1 percent.
The Stoxx Europe 600 Index added 1.1 percent to 301.04 at the close of trading, extending its weekly rise to 1.7 percent. The gauge yesterday climbed to a seven-week high as the European Central Bank lowered its benchmark interest rate and companies posted better-than-expected earnings. The equity measure completed an 11th month of gains in April, its longest winning streak since 1997.
“The jobs data was not just a positive surprise, it was a relief that the labor market in the U.S. is continuing its recovery,” said Thomas Lehr, an investment strategist at Credit Suisse Group AG in Zurich. “Investors are not as skeptical anymore, after some shaky weeks with some disappointing economic data and earnings. The world looks a bit better now -- along with the continued central bank stimulus. The rally looks set to go on in May.”
In the U.S., a Labor Department report showed that payrolls expanded by 165,000 workers last month following a revised 138,000 increase in March that was larger than first estimated. Economists on average had forecast a gain of 140,000 in April. Revisions to the prior two months’ reports added a total of 114,000 jobs to the employment count in February and March.
The jobless rate fell to 7.5 percent from 7.6 percent a month earlier. That’s the lowest since December 2008. Economists had forecast that the rate would remain unchanged.
The European Commission said the euro-area economy will shrink more in 2013 than previously expected. Gross domestic product in the 17-nation region will decline 0.4 percent, compared with a February prediction of a 0.3 percent drop. This follows a 0.6 percent contraction in 2012 and shows the region headed for its first ever back-to-back years of falling output.
National benchmark indexes rose in all western European markets except Greece, which was closed for Orthodox Easter. The U.K.’s FTSE 100 gained 0.9 percent and France’s CAC 40 added 1.4 percent. Germany’s DAX climbed 2 percent to a record high.
Adidas advanced 7.6 percent to 85.50 euros. First-quarter net income of 308 million euros ($404 million) beat the average 298.5 million-euro analyst projection. The company also said its gross margin widened to a record.
Vallourec soared 12 percent to 40.39 euros, the most since January 2005. First-quarter earnings before interest, taxes, depreciation and amortization totalled 191 million euros, exceeding the average 178 million-euro analyst estimate in a Bloomberg survey.
CGGVeritas surged 12 percent to 18.69 euros as the largest seismic surveyor of oilfields posted first-quarter net income of $79 million, following a loss of $3 million a year earlier. The Paris-based company said it expects a 25 percent-increase in full-year sales and positive cash flow.
Sky Deutschland AG, the German pay-TV provider controlled by Rupert Murdoch’s News Corp., climbed 7.5 percent to 4.85 euros after posting an unexpected operating profit in the first quarter. Analysts on average had predicted a loss.
RBS dropped 5.7 percent to 289.8 pence, after Britain’s largest state-owned lender said operating profit fell to 829 million pounds ($1.3 billion) in the first quarter. That missed the 1.2 billion-pound estimate of six analysts surveyed by Bloomberg.
Hugo Boss declined 6.2 percent to 87.04 euros, its biggest loss since Sept. 11, as majority owner Permira Advisers LLP sold 7 million shares, or about a 10 percent stake, in the German luxury-clothing maker. The sale was priced at the lower end of a revised price range of 87.50 euros to 88.50 euros, two people familiar with the matter said today.
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