European Stocks Little Changed as Data Offsets Spain
EasyJet Plc (EZJ), Europe’s second-biggest discount airline, rose 3.5 percent as full-year earnings beat its forecasts. BTG Plc (BTG) gained the most in almost a year after increasing its financial- year revenue forecast. FirstGroup (FGP) Plc plunged 21 percent after Britain’s biggest train operator was stripped of the country’s premier express route.
The Stoxx Europe 600 Index (SXXP) slipped 0.1 percent to 271.37 at the close in London, after swinging between gains and losses at least 12 times today. The gauge has rallied 16 percent from this year’s low on June 4 as European Central Bank policy makers agreed on an unlimited asset-purchase program and the Federal Reserve announced a third round of quantitative easing.
“It’s a good sign when the market starts reacting to macro data again,” said Anja Hochberg, head of investment strategy at Credit Suisse Group AG in Zurich. “The latest economic numbers show that the economy is bottoming out. However -- and this speaks for an even bigger upside potential of the markets -- the economic hopes still need to show in real terms. The sentiment is not yet exhausted. One more reason to invest in equities.”
National benchmark indexes fell in half of the 18 western European markets today. France’s CAC 40 retreated 0.2 percent, the U.K.’s FTSE 100 gained 0.3 percent while Germany’s DAX rose 0.2 percent.
In the U.S., a report from ADP Employer Services showed that private employers hired 162,000 workers in September after revised numbers showed they signed up 189,000 the prior month. Last month’s figure beat the average forecast for 140,000 in a Bloomberg survey.
Labor Department figures on Oct. 5 may show the U.S. jobless rate rose in September to 8.2 percent from 8.1 percent in August, according to the median forecast of 82 economists surveyed by Bloomberg. Nonfarm payrolls increased by 115,000 last month, the report may also show.
Separate data today showed that U.S. service industries expanded more than estimated in September. The Institute for Supply Management’s non-manufacturing index, which covers almost 90 percent of the economy, rose to to 55.1 last month from 53.7 in August. That compares with the average economist forecast that called for a drop to 53.4. A reading above 50 signals expansion.
In Europe, Spain has no plans to ask for a bailout soon, Prime Minister Mariano Rajoy said yesterday, in response to mounting speculation that a request was imminent.
Euro-area retail sales unexpectedly increased for a fourth month in August as demand rebounded in Germany, Europe’s largest economy.
Sales rose 0.1 percent from July, the European Union’s statistics office in Luxembourg said. Economists in a Bloomberg survey had forecast a decline of 0.1 percent.
EasyJet rallied 3.5 percent to 615 pence, the highest price since January 2008, after saying full-year earnings beat its projections following a surge in demand for flights from London after the end of the 2012 Olympic Games.
Pretax profit for the fiscal year ended Sept. 30 will be in the range of 310 million pounds ($500 million) to 320 million pounds, EasyJet said today. That’s at least 25 percent higher than a year earlier and compares with guidance given on July 25 for a figure no higher than 300 million pounds.
BTG advanced 9 percent to 363.2 pence, the biggest advance since Oct. 5, 2011, after the drugmaker raised its revenue forecast for the year to March 31, 2013 to between 205 million pounds and 215 million pounds, , citing “a strong first-half performance and a positive outlook for the second half.”
Sodexo (SW) climbed 2.3 percent to 60.83 euros in Paris after Credit Suisse Group AG raised its recommendation for the world’s second-biggest provider of catering services to outperform, the equivalent of buy, from neutral.
FirstGroup plunged a record 21 percent to 193.4 pence. The U.K. Department for Transport canceled the West Coast competition to run trains from London to Scotland citing the discovery of “serious technical flaws” in the franchise process. FirstGroup had won the route in August from billionaire Richard Branson’s Virgin Group.
Vestas Wind Systems A/S (VWS) fell 5.2 percent to 37.90 kroner after the management of the world’s biggest wind-turbine maker failed to convince investors at a capital markets day of its plans to resurrect the company. Haakon Levy, an analyst with DNB Markets, advised investors on Sept. 24 to hold onto the stock because it might rise on the presentation.
The shares also fell after the company late yesterday said a former chief financial officer was involved in two unauthorized deals in India that may cost the company as much as 18 million euros ($23 million).
Lamprell Plc (LAM) slumped 36 percent to 70 pence after saying its 2012 loss will be wider than forecast and that it will introduce changes to the senior management team.
Tesco Plc (TSCO) dropped 2.6 percent to 327.95 pence after the U.K.’s largest retailer reported the first profit drop in almost two decades after increasing investment to halt declining supermarket sales.
So-called trading profit fell 11 percent to 1.59 billion pounds ($2.6 billion) in the first half of the financial year, also hurt by reduced earnings in South Korea and central Europe, Cheshunt, England-based Tesco said today. The average estimate of 12 analysts compiled by Bloomberg was 1.62 billion pounds.
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