European Stocks Rise as Company Earnings Beat Forecasts
European stocks rose to the highest level since early April as companies reported quarterly earnings that exceeded analysts’ estimates.
Akzo Nobel NV (AKZA) jumped 6.3 percent after posting second- quarter results that beat forecasts. Remy Cointreau SA, France’s second-biggest distiller, increased 6.2 percent on higher revenue. Nokia Oyj (NOK1V) surged 12 percent after sales of its flagship smartphone beat analysts’ estimates.
The Stoxx 600 climbed 1.1 percent to 261.86 at the close of trade. The gauge is heading for a seventh straight week of gains, which would be the longest winning streak in more than six years, as central banks cut interest rates and euro-area leaders eased repayment rules for Spanish banks.
“Markets are focusing on the fact that earnings are still strong,” said Theodore Krintas, managing director of Attica Wealth Management in Athens. “What I see is a kind of aversion to bonds generally. It seems that European markets are gaining from the fact that extra liquidity is moving towards equities.”
The U.S. economy expanded at a “modest to moderate” pace in June and early July, the Federal Reserve said yesterday in its Beige Book business survey, which is based on reports from its 12 district banks.
Sales of previously owned U.S. homes unexpectedly declined in June to an eight-month low, showing the recovery in residential real estate will take time to develop.
Purchases decreased 5.4 percent to a 4.37 million annual rate last month from a revised 4.62 million in May, figures from the National Association of Realtors showed today in Washington. The median forecast of economists surveyed by Bloomberg News called for a 4.62 million pace.
More Americans than forecast filed first-time claims for unemployment insurance payments last week as the volatility induced by the annual auto-plant retooling period wore off.
Applications for jobless benefits increased by 34,000 to 386,000 in the week ended July 14, Labor Department figures showed today. Economists forecast 365,000 claims, according to the median estimate in a Bloomberg News survey.
Spanish five-year notes yielded an average 6.459 percent, compared with 6.072 percent a month ago. French yields for the same maturity fell to 0.86 percent, almost half of last month’s level. Spain sold debt as lawmakers debated spending cuts in Parliament, where police erected barriers and stood guard.
Spanish 10-year bonds extended their decline, pushing the yield through 7 percent for the first time since July 10, after the auction.
National benchmark indexes rose in all 18 western European markets except Portugal and Iceland. The U.K.’s FTSE 100 gained 0.5 percent. France’s CAC 40 climbed 0.9 percent and Germany’s DAX advanced 1.1 percent.
Akzo Nobel, the world’s largest paintmaker, gained 6.3 percent to 43.05 euros after saying second-quarter earnings before interest, taxes, depreciation and amortization rose 8 percent to 593 million euros. Analysts predicted 569 million euros.
Remy Cointreau (RCO) climbed 6.2 percent to 93.24 euros, the highest since at least Oct. 1989, after it reported increased first-quarter sales that beat analyst expectations as consumers in Asia and the U.S. bought more Remy Martin cognac. Pernod Ricard SA, France’s biggest distiller, advanced 3.3 percent to 86.82 euros.
Nokia surged 12 percent to 1.54 euros. The unprofitable mobile-phone maker posted sales of its flagship smartphone that topped some analysts’ estimates. Sales of the Lumia product increased to 4 million units in the second quarter, Espoo, Finland-based Nokia said.
Hermes International SCA (RMS) gained 3.1 percent to 237.20 euros after it reported second-quarter sales that beat analysts’ estimates and said first-half profit grew in line with revenue.
Actelion Ltd. (ATLN), the Swiss producer of the Tracleer blood- pressure drug, climbed 5.7 percent to 43.60 Swiss francs as it raised its profit forecast for 2012 after reducing spending and reporting second-quarter revenue that beat estimates.
Novartis AG (NOVN) rose 1.7 percent to 56 francs. The company reported second-quarter profit that declined less than analysts forecast, helped by increasing sales of new products such as the Gilenya treatment for multiple sclerosis and the Afinitor cancer drug.
Electrolux AB (ELUXB), the world’s second-biggest appliance maker, rose 6.2 percent to 153.70 kronor as it reported second-quarter earnings that beat analysts’ estimates after it succeeded in pushing through higher prices in North America.
Alstom SA (ALO) added 3.1 percent to 26.72 euros, gaining for a fifth day. The third-largest power equipment manufacturer reported first-quarter orders that beat analysts’ estimates as demand for trains and subways jumped and it booked a previously announced turbine contract in Israel.
Sandvik AB (SAND), the world’s biggest maker of metal-cutting tools, gained 6.1 percent to 92.15 kronor after it reported second-quarter profit that beat estimates on strong manufacturing demand in North and South America.
Afren Plc (AFR), a U.K.-based explorer focused on Nigeria and Iraq, surged 7.7 percent to 128 pence, the highest level in more than two months, after an exploration well in the Iraqi region of Kurdistan flowed oil.
Fortum Oyj (FUM1V), Finland’s biggest utility, tumbled 8 percent to 13.44 euros after the company said it sees challenges in the coming months.
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