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Swiss Stocks Rise to a Five-Month High as Novartis Climbs

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Oct. 25 (Bloomberg) -- Stocks in Switzerland advanced to their highest level in five months as Novartis AG rallied and a U.S. report showed that durable-goods orders rose by the most in three months in September.

Novartis, which accounts for 19 percent of the benchmark Swiss Market Index, climbed 0.9 percent. Adecco SA lost 1.8 percent after UBS AG recommended selling shares in the world’s largest supplier of temporary workers. Credit Suisse Group AG retreated after JPMorgan Chase & Co. downgraded its rating for Switzerland’s second-biggest bank.

The SMI climbed 0.2 percent to 8,249.31 at the close in Zurich. The equity benchmark has gained 2 percent this week. The gauge has rallied 2.8 percent so far in October as U.S. lawmakers reached an agreement to reopen the partially closed government and avoid a sovereign default. The broader Swiss Performance Index also added 0.2 percent today.

“Credit Suisse and Adecco are weighing on the Swiss market today,” said Benno Galliker, a trader at Luzerner Kantonalbank AG in Lucerne, Switzerland. “Despite the negative news, the SMI is holding up quite well thanks to Novartis. The focus will continue to be on corporate earnings.”

The volume of shares changing hands in SMI-listed companies was 16 percent greater than the average of the past 30 days, according to data compiled by Bloomberg.

In the U.S., a Commerce Department report showed bookings for goods meant to last at least three years increased 3.7 percent. That beat the median forecast of 67 economists surveyed by Bloomberg for a 2.3 percent advance. They gained a revised 0.2 percent in August.

German Confidence

In Germany, the Ifo institute’s business-climate index, based on a survey of 7,000 executives, fell to 107.4 this month from 107.7 in September. That missed the median forecast of 108 in a Bloomberg News survey of 39 economists.

Novartis gained 0.9 percent to 70.35 Swiss francs, contributing the most to the SMI’s advance.

Adecco dropped 1.8 percent to 65.75 francs as UBS lowered the stock to sell from neutral. The brokerage said that the shares’ rally has pushed the company’s valuation beyond its forecast. Adecco has rallied 37 percent this year, taking it to 18.7 times estimated earnings, according to Bloomberg data.

Credit Suisse dropped 0.8 percent to 28.77 francs. JPMorgan lowered the stock to neutral from overweight, meaning that investors should no longer buy more of the shares. The brokerage cited the year-to-date rally by the lender’s shares. Credit Suisse has surged 32 percent this year, while a gauge of European banks has gained 21 percent.

Mortgage Bonds

Separately, the U.S. Justice Department has started to examine whether Credit Suisse broke the law with mortgage-bond sales, according to people briefed on the situation. Citigroup Inc., JPMorgan and Bank of America Corp. will also face probes, people familiar with those cases said.

Georg Fischer AG slid 2.6 percent to 598 francs after Credit Suisse lowered the maker of piping systems to neutral, the equivalent of hold, from outperform. The brokerage said the shares have neared its price estimate of 620 francs.

To contact the reporter on this story: Corinne Gretler in Zurich at cgretler1@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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