European stocks erased losses in the final minutes of trading as Federal Reserve Bank of St. Louis President James Bullard said the U.S. central bank should continue its bond-buying program.
Marks & Spencer Group Plc rallied the most in two months after saying it will reduce capital spending to boost profit margins. Burberry Group Plc climbed to a one-year high as the U.K.’s largest luxury-goods maker reported earnings that beat estimates. Carnival Corp., the world’s largest cruise operator, slid the most this year after cutting its forecasts.
The Stoxx Europe 600 Index rose less than 0.1 percent to 309.99 at the close, having earlier lost as much as 0.7 percent. The gauge has rallied 96 percent since March 2009 as European Central Bank President Mario Draghi pledged to preserve the euro and the Fed embarked on three rounds of stimulus. The equity benchmark has climbed to the highest level since June 2008 and is on course for a 12th straight month of gains, the longest winning streak since 1997.
Investors want to “know when the quantitative easing will run its course,” Tim Harris, who oversees about $25 billion as chief investment officer at Lloyds TSB Private Banking in London, said on Bloomberg Television before Bullard’s comments. “Not too hot and not too cold is what we’ll be hoping for from the Fed. It’s language as much as anything else that markets will be looking for.”
Bullard, speaking in Frankfurt as European equity markets closed, said the Fed should continue its bond purchases because markets indicate they are improving financial conditions. The program can be adjusted based on how the economy changes, said Bullard, who votes on the policy-setting Federal Open Market Committee this year.
Fed Chairman Ben S. Bernanke will discuss the economic outlook in congressional testimony tomorrow, as the bank also publishes minutes of its last policy meeting.
National benchmark indexes increased in 11 of the 18 western European markets. France’s CAC 40 rose 0.3 percent and Germany’s DAX advanced 0.2 percent. The U.K.’s FTSE 100 climbed 0.7 percent to the highest close since 1999.
Greece’s ASE Index retreated 4 percent today, pulled down by shares of lenders. National Bank of Greece SA tumbled 27 percent to 1.15 euros after announcing details of a share sale. Piraeus Bank SA slid 21 percent to 36 euro cents.
Marks & Spencer advanced 6.2 percent to 467.9 pence, the highest since January 2008. The U.K.’s biggest clothing retailer said it will reduce capital spending to 775 million pounds ($1.2 billion) this year and 550 million pounds next year.
Burberry jumped 5.3 percent to 1,541 pence, the highest since April 2012. The company reported full-year profit that beat estimates, boosted by strong demand in China and Hong Kong, and increased the dividend by more than analysts expected.
Capita Plc rallied 5.9 percent to 1,005 pence, the highest price since at least 1989, as the company said Telefonica SA’s O2 mobile-phone unit selected it as the preferred bidder for a 10-year customer-services contract worth about 1.2 billion pounds. The provider of criminal-records services for the U.K. Home Office raised its forecast for so-called organic-revenue growth in 2013.
A gauge of mining shares was the best performer among the 19 industry groups in the Stoxx 600, rising 2.3 percent.
BHP Billiton Ltd., the world’s biggest mining company, advanced 3 percent to 1,982 pence. Rio Tinto Group, the second-largest, climbed 2.6 percent to 2,979 pence. Polymetal International Plc, Russian gold and silver producer, jumped 8.4 percent to 669 pence for the biggest gain since the shares started trading in London in 2011.
Carnival dropped 5.9 percent to 2,267 pence in London after the cruise operator lowered its profit forecast for the second half of 2013, saying price cuts undertaken after a series of mishaps will hurt margins.
Sonova Holding AG, the world’s largest maker of hearing aids, retreated 1,1 percent to 103.50 Swiss francs after saying profit growth will slow. Earnings before interest, taxes and acquisition-related amortization and impairments will rise by 9 percent to 13 percent in local currencies this fiscal year, compared with a 15 percent jump in the 12 months ended March, the company said.
United Internet AG tumbled 7.2 percent to 21.57 euros as the German broadband provider reported first-quarter sales of 629.7 million euros ($810 million), trailing the average analyst forecast of 635 million euros. The shares had climbed 23 percent this quarter before today.