June 17 (Bloomberg) -- European stocks rose to a one-week high, rebounding from their longest streak of weekly losses in 14 months, as investors awaited this week’s Federal Reserve meeting for signs on the pace of stimulus reduction.
Telefonica SA, Europe’s most indebted telephone company, climbed 2.4 percent after a report that AT&T Inc. had been keen to acquire the company. ABB Ltd. advanced 2.6 percent after the world’s largest supplier of power grids named a new chief executive officer. Saipem SpA plunged to a four-year low after cutting its 2013 guidance for the second time in six months.
The Stoxx Europe 600 Index rose 0.7 percent to 293.25 at the close, for the first back-to-back gains this month. The gauge fell 1.5 percent last week and has lost 5.6 percent since May 22 when Federal Reserve Chairman Ben S. Bernanke said the central bank could pare quantitative easing if the U.S. economy improves sustainably.
“Markets are looking for peace and stability after the recent roller-coaster ride,” said John Plassard, who helps oversee $28 billion as vice president at Mirabaud Securities LLP in Geneva. “This week could lower the pressure and volatility. Investors may be getting used to the idea that a very gradual tapering isn’t such bad news, considering that the economy is slowly recovering.”
National benchmark indexes climbed in 14 of the 17 western European markets trading today. The U.K.’s FTSE 100 gained 0.4 percent, France’s CAC 40 rose 1.5 percent, and Germany’s DAX advanced 1.1 percent.
The Federal Open Market Committee will hold its policy meeting tomorrow and the day after, with Bernanke explaining his stance after the decision on June 19. At stake is the Fed’s monthly purchase of $85 billion of Treasuries and mortgage securities and the target rate for overnight lending between banks, which has been kept at almost zero since December 2008.
A report showed that manufacturing in the New York, northern New Jersey and southern Connecticut region unexpectedly increased this month. The Fed Bank of New York’s general economic index rose to 7.84 in June, from minus 1.4 in May. Economists had predicted a reading of zero, the dividing line between expansion and contraction.
More than $500 billion wiped off the value of U.S. stocks is providing opportunities for investors who remember that equities tend to rise when the Fed begins reducing efforts to stimulate the economy. The S&P 500 rallied an average 16 percent over two years the last four times the central bank started raising interest rates, according to data compiled by Bloomberg.
Group of Eight leaders gather for a two-day summit in Northern Ireland today with boosting trade between the U.S. and the European Union near the top of the agenda. EU governments last week gave the European Commission a mandate for the negotiations. A deal will increase global demand by 100-billion euros ($133 billion), the Brussels-based commission said.
A gauge of European telecommunications companies posted the best performance on the Stoxx 600, gaining 1.6 percent.
Telefonica SA advanced 2.4 percent to 10.27 euros as El Mundo reported that Spain blocked AT&T Inc.’s takeover bid for the company because Telefonica is “strategic” to Spain’s economy. Spokeswoman Marisa Navas said the company didn’t receive any formal or informal approach from AT&T.
Belgacom SA rose 1.9 percent to 17.53 euros. Exane BNP Paribas raised its rating of Belgium’s largest telephone company to neutral from underperform. Belgacom’s Scarlet brand last week introduced an 8 euro-per-month mobile-service plan.
France Telecom SA climbed 3.1 percent to 7.59 euros. Vodafone Group Plc added 1.5 percent to 182.7 pence.
ABB rose 2.6 percent to 20.71 francs after the company named as CEO Ulrich Spiesshofer, who oversaw the company’s $1 billion deal to buy California-based Power-One Inc. He will take over after Joe Hogan steps down on Sept. 15.
Hannover Re added 3.3 percent to 57.30 euros as the fourth-largest reinsurer said it’s sticking to its profit goal for 2013 as the cost of floods in Germany, Austria and the Czech Republic probably won’t exceed its budget for such losses.
Saipem plunged 29 percent to 14.24 euros, for the worst performance on the Stoxx 600. Italy’s largest oil-and-gas engineering company cut its forecast for earnings before interest and tax this year by 650 million euros to 750 million euros. The company now expects a net loss of 300 million euros to 350 million euros.
Imagination Technologies Group Plc fell 3.4 percent to 304.7 pence as Barclays Plc cut the U.K. designer of chip technology for phones and tablets to equal weight, the equivalent of hold, from overweight. Barclays cited pressure on smartphone prices.
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