European Stocks Rebound From Biggest Decline in a Month; LVMH, SKF Advance
LVMH, the world’s largest luxury-goods maker, climbed 5 percent after first-quarter sales topped projections. SKF, the biggest maker of ball bearings, rallied 6.4 percent after reporting record quarterly profit. Novartis, Europe’s second- largest drugmaker by sales, advanced the most in four months.
The Stoxx Europe 600 Index gained 0.5 percent to 274.42 at the 4:30 p.m. close in London. The gauge tumbled 1.7 percent yesterday as Standard & Poor’s Ratings Service cut its long-term sovereign credit outlook for the U.S., the world’s largest economy, to negative from stable. The benchmark measure of European equities has still climbed 4.7 percent from this year’s low on March 16.
“Earnings have been of good quality,” said Jerome Forneris, who helps manage $11 billion at Banque Martin Maurel in Marseille. “If the whole earnings season is like this, we hope the market will make that its focus. This is good news, but in a calmer environment, the market would be gaining more. The market still is timid.”
Of the 16 companies in the Stoxx 600 that have reported earnings since April 11, 11 have beaten estimates for per-share profit, according to data compiled by Bloomberg. In the U.S., Goldman Sachs Group Inc. posted a smaller decline in earnings that projected today.
CAC 40, FTSE
European services and manufacturing growth unexpectedly accelerated in April, suggesting the economy is weathering surging energy costs and tougher austerity measures. A composite index based on a survey of euro-area purchasing managers in both industries rose to 57.8 from 57.6 in March, London-based Markit Economics said today. A reading above 50 indicates growth.
A gain in U.S. housing starts in March failed to make up for ground lost the prior month as homebuilders continue to struggle almost two years into the economic recovery. Work began on 549,000 houses at an annual pace, up 7.2 percent from the prior month and exceeding the 520,000 median forecast of economists surveyed by Bloomberg News, figures from the Commerce Department showed today. Starts fell 19 percent in February to the lowest level in almost two years.
Luxury Goods Gain
LVMH advanced 5 percent to 115.20 euros, pacing gains in luxury-goods shares. The company said first-quarter sales rose 17 percent, topping analysts’ estimates, as wealthy customers bought more Givenchy handbags and Hublot watches.
Burberry Group Plc (BRBY) rallied 6 percent to 1,215 pence, a record high. The U.K.’s largest luxury retailer reported fiscal fourth-quarter sales that beat estimates and said adjusted full- year profit will be near the top end of market expectations.
Christian Dior SA (CDI) climbed 3.8 percent to 100.90 euros. Cie. Financiere Richemont SA, the world’s largest jewelry maker, added 3.7 percent to 52.25 francs.
SKF surged 6.4 percent to 186.90 kronor. The maker of ball bearings said first-quarter net income rose to 1.57 billion kronor ($250 million) from 1.03 billion kronor a year earlier. Analysts on average expected net income of 1.43 billion kronor, a survey of 17 estimates compiled by Bloomberg showed.
Novartis gained 3.5 percent to 50.30 Swiss francs, the largest increase since December. The drugmaker’s first-quarter profit fell 6 percent to $2.77 billion, surpassing the $2.57 billion average estimate in a Bloomberg survey.
Daimler AG (DAI) advanced 0.9 percent to 49.08 euros as auto- industry shares led gains in the Stoxx 600. The carmaker sees “significant” growth in China’s car market, with annual industry sales of 20 million to 30 million vehicles “within reach” over the next five to 10 years, Chief Executive Officer Dieter Zetsche said in Shanghai today.
Faurecia (EO) SA advanced 4.3 percent to 25.75 euros. Europe’s biggest maker of car interiors had first-quarter revenue of 3.96 billion euros ($5.7 billion), compared with 3.2 billion euros a year earlier.
Zodiac Aerospace (ZC) SA increased 2.7 percent to 51.50 euros. Europe’s largest maker of aircraft seats had first-half net income of 114.3 million euros, up from 44.1 million euros a year earlier.
Electricite de France SA jumped 3.9 percent to 27.66 euros after the French government matched the price requested by the utility for the sale of its nuclear power to competitors.
Leoni AG (LEO), a maker of electric cables and wires, soared 6.4 percent to 32.99 euros after raising its guidance. The company said it sees earnings before interest and taxes of about 210 million euros in 2011 and sales of about 3.4 billion euros.
TeliaSonera AB (TLSN) retreated 2.2 percent to 48.69 kronor. Sweden’s largest phone company said first-quarter net income declined to 4.65 billion kronor from 4.72 billion kronor a year earlier. Analysts on average had forecast net income of 4.81 billion, a survey of 14 estimates compiled by Bloomberg showed.
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