European Stocks Boost Weekly Gain After U.S. Data Beat Estimates

Europe Stocks Finish Positive for the Week
  • Eutelsat leads media shares lower after profit warning
  • Buoygues rises after noting improvement at telecom business

European shares climbed, wiping out earlier losses, after data showing better-than-forecast U.S. data on retail sales and consumer sentiment stoked optimism about the health of the world’s biggest economy.

Retailers posted the best gains among industry groups, with Tesco Plc and Distribuidora Internacional de Alimentacion SA up more than 3.8 percent. Eutelsat Communications SA tumbled 28 percent, dragging media shares lower, after the French satellite operator cut its forecasts for this year and the next. Peer SES SA slid 8.1 percent.

The Stoxx Europe 600 Index gained 0.5 percent at the close of trading. It erased a drop of as much as 0.8 percent after reports showed U.S. retail sales in April rose the most in a year, while consumer sentiment in May also improved. Stocks have struggled for direction after reaching a three-month high on April 20 amid mixed economic cues. Data earlier today showed the euro-area economy grew slightly less than initially estimated, despite German growth that beat forecasts.

“On the surface U.S. retail sales look surprisingly good, especially in the light of recent earnings from some of the retailers," said Hugh Grieves, who runs the 145 million-pound ($206 million) at Miton Group in London. “Investor confidence in the strength of the U.S. consumer has been shaken recently, but this should give the market confidence that the economy is not entering a slow patch. This is only one data point and there have been many others that point the other way. We are not in the clear yet.”

A rally that pushed the Stoxx 600 up as much as 16 percent from a February low lost steam as concern resurfaced about global growth and analysts slashed profit estimates to forecast a contraction in 2016. Buoyed by today’s advance, the Stoxx 600 posted its first weekly advance in three, up 0.9 percent.

Among other shares active on corporate news today, Bouygues SA rose 2.6 percent after the building and media conglomerate said results at its telecommunications business improved and that France’s construction business is stabilizing. Ubisoft Entertainment SA jumped 8 percent after reporting earnings that beat its targets.

Subsea 7 SA slipped 9.1 percent after a report that Petroleo Brasileiro SA is in talks with the company to cancel some contracts.

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