Nov. 14 (Bloomberg) -- European stocks advanced for the first time in three days as Federal Reserve chairman nominee Janet Yellen said she is committed to promoting a strong U.S. economic recovery and will ensure monetary stimulus isn’t removed too soon.
Bouygues SA jumped 6.2 percent after reporting an increase in third-quarter profit that beat analysts’ estimates. Ophir Energy Plc surged 10 percent after it sold a 20 percent stake in three gas blocks for $1.3 billion. RWE AG declined 5.1 percent after saying profit next year will slide because of weak power prices. Serco Group Plc tumbled the most in at least 22 years after it forecast a decline in profit next year.
The Stoxx Europe 600 Index gained 0.8 percent to 322.43 at the close of trading. The gauge has rallied for the past five weeks as the Fed maintained the pace of its bond purchases and the European Central Bank lowered its key interest rate.
“Comments from the Fed’s Yellen were perceived as being dovish, which helps support market gains,” Richard Hunter, head of equities at Hargreaves Lansdown Plc in London, wrote in an e-mail. “Conditions remain supportive for equities – a continuation of loose monetary policy looks likely and recent quarterly earnings have generally beaten expectations, so these factors could augur well for the traditional Santa rally.”
Yellen said the economy and labor market are performing “far short of their potential” and must improve before the central bank can begin reducing monetary stimulus.
“It’s important not to remove support, especially when the recovery is fragile and the tools available to monetary policy, should the economy falter, are limited given that short-term interest rates are at zero,” she said in testimony to the Senate Banking Committee in Washington today.
“Yellen’s comments are well timed as investors are nervous about tapering,” Witold Bahrke, who helps oversee $55 billion as a senior strategist at PFA Asset Management in Copenhagen, said by phone. “There is a lot of noise at the moment and not much news, but right now the noise is supportive.”
Gross domestic product in the 17-nation euro area rose 0.1 percent in the three months through September, down from a 0.3 percent expansion in the second quarter, the European Union’s statistics office in Luxembourg said today. That’s in line with the median forecast in a Bloomberg News survey of 41 economists.
National benchmark indexes rose in 16 of the 18 western European markets today. France’s CAC 40 added 1 percent, Germany’s DAX climbed 1.1 percent and the U.K.’s FTSE 100 increased 0.5 percent.
Bouygues jumped 6.2 percent to 29.52 euros. The French building and telecommunications company said third-quarter current operating profit rose to 542 million euros ($728 million) from 478 million euros a year earlier. Analysts surveyed by Bloomberg had forecast 465 million euros, according to the average of four estimates.
Ophir Energy surged 10 percent to 362.1 pence, for the biggest gain on the Stoxx 600. The U.K oil and gas explorer sold stakes in the gas blocks offshore Tanzania in East Africa to Pavilion Energy Pte, the liquefied natural gas unit of Temasek Holdings Pte, Singapore’s state-owned investment company.
Zurich Insurance Group AG advanced 2.5 percent to 258.5 euros after it said third-quarter profit rose 64 percent, beating analysts’ estimates. Net income jumped to $1.1 billion from $672 million a year ago, Switzerland’s biggest insurer said in a statement. That beat the $993.5 million average estimate of eight analysts surveyed by Bloomberg.
Burberry Group Plc added 1.9 percent to 1,489 pence after saying first-half sales exceeded 1 billion pounds ($1.6 billion) for the first time as online revenue increased. Adjusted pretax profit for the six months ended Sept. 30 rose to 174 million pounds from 173 million pounds a year earlier, the U.K.’s largest luxury-goods maker also said in a statement.
Taylor Wimpey Plc climbed 2 percent to 105.5 pence. The U.K.’s second-largest homebuilder by volume forecast an improvement in “all of our key financial metrics for the second half of 2013,” driven by a better trading environment.
RWE slipped 5.1 percent to 25.76 euros. The German utility company said that recurrent net income, the measure used to calculate the dividend, will drop to 1.3 billion euros to 1.5 billion euros in 2014 from around 2.4 billion euros forecast for this year.
German peer EON AG slid 1.7 percent to 13.54 euros. A gauge of utilities companies dropped the most of the 19 industry groups in the Stoxx Europe 600 Index.
Serco tumbled 17 percent to 419.1 pence after it forecast a decline in profit next year as it grapples with a criminal inquiry into the handling of U.K. government prison contracts. Serco predicted full-year operating profit of about 307 million pounds, compared with an estimate from analysts, given by the Hook, England-based company, of 325 million pounds.
CaixaBank SA fell 10 percent to 3.41 euros, its biggest drop since October 2008, after owner La Caixa sold an 8.6 percent stake in Spain’s third-biggest bank for 1.65 billion euros to boost its own capital.
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