European Stocks Advance; Carmakers Gain, Siemens Declines
European stocks advanced for a third day, as gains by Veolia Environnement SA, SAP AG and carmakers, as well as a decline in applications for U.S. jobless benefits offset the failure of euro-region policy makers to reach a decision on assisting debt-laden Greece.
Veolia Environnement rose 1.3 percent after getting approval for the sale of its U.S. waste-management business. SAP AG climbed 2 percent. Fiat SpA climbed 1.6 percent. Johnson Matthey (JMAT) Plc slumped 5.8 percent after it reported a drop in first-half profit. Imagination Technologies Group Plc slipped 3.9 percent as it said that it will monitor mobile chip designer CEVA Inc.’s counter bid for MIPS Technologies Inc.
The Stoxx Europe 600 Index (SXXP) rose 0.2 percent to 270.11 at the close of trading. The gauge has climbed 16 percent from its low on June 4, boosted by stimulus announcements from the European Central Bank and U.S. Federal Reserve as well as better-than-forecast economic data.
“The European markets are very keen on at least a small solution for Greece which is enough today to keep the market alive and the U.S. data is not that bad,” said Robert Halver, head of capital markets research at Baader Bank AG in Frankfurt. “This is enough for the markets today and may be the beginning of a year-end rally.”
The volume of shares changing hands on the Stoxx 600 was 15 percent lower than the average of the last 30 days, according to data compiled by Bloomberg.
The VStoxx Index (V2X), which tracks the cost of Euro Stoxx 50 Index options, fell 4.9 percent to 17.85, its lowest level since December 2007.
More than 11 hours of talks broke up early today in Brussels with praise for the Greek government’s economic overhaul and a declaration that a financing accord will wait at least until a meeting of the ministers on Nov. 26.
With creditors led by Germany refusing to put up fresh money or offer debt relief, the finance chiefs were unable to scrape together enough funds from other sources to help alleviate Greece’s debt burden, set to hit 190 percent of gross domestic product in 2014.
In the U.S., Federal Reserve Chairman Ben S. Bernanke said yesterday an agreement on ways to reduce long-term federal budget deficits would remove an impediment to growth, while failure to avoid the so-called fiscal cliff would pose a “substantial threat” to the recovery.
Fewer Americans filed applications for unemployment benefits last week as damage to the labor market caused by superstorm Sandy began to subside.
Jobless claims decreased by 41,000 to 410,000 in the week ended Nov. 17, the Labor Department reported today in Washington. The number of applications matched the median forecast of 48 economists surveyed by Bloomberg.
The index of U.S. leading economic indicators rose at a slower pace in October as businesses held back on investment in anticipation of domestic fiscal policy changes set to take effect in January.
The Conference Board’s gauge of the outlook for the next three to six months increased 0.2 percent after a revised 0.5 percent gain in September that was lower than initially reported, the New York-based group said today. Economists projected the October gauge would climb 0.1 percent, according to the median estimate in a Bloomberg survey.
The Thomson Reuters/University of Michigan final index of U.S. consumer sentiment for November rose to 82.7 from 82.6 at the end of last month. Economists projected 84.5 for the gauge after a preliminary November reading of 84.9, according to the median estimate in a Bloomberg survey.
Veolia Environnement (VIE) advanced 1.3 percent to 7.90 euros. The world’s largest water company said it obtained approval from the Department of Justice for the sale of its U.S. waste- management business for $1.91 billion, which will cut its debt by $1.84 billion.
SAP, the largest maker of enterprise-management software, added 2 percent to 58.82 euros, its highest price since Sept. 5, as Salesforce.com Inc. reported third quarter earnings per share in line with analysts’ estimates and raised forecasts for 2013 and 2014.
BG Group Plc, the U.K.’s third-largest natural gas provider, rose 2.8 percent to 1,060 pence amid takeover speculation reported in The Independent newspaper.
Swiss Life Holding AG (SLHN) gained 6.1 percent to 124.20 Swiss francs. Switzerland’s biggest life insurer may write down almost half the value of its German broker unit AWD Holding AG, an analyst survey showed.
Swiss Life, which plans to present new targets at an investor day on Nov. 28, may write down about 463 million francs ($491 million), according to the average estimate of five analysts surveyed by Bloomberg. The insurer valued the unit at 1.3 billion francs at the end of June. Christian Pfister, a spokesman at Swiss Life in Zurich, declined to comment.
Royal KPN NV (KPN), the former Dutch phone monopoly, added 6.8 percent to 4.26 euros. Moody’s Investors Service Inc. said European cable operators’ revenues will grow by between 5 percent and 6 percent in 2013.
Fiat (F), the Italian carmaker which controls Chrysler Group LLC, rose 1.6 percent to 3.37 euros. Renault SA (RNO), France’s second-biggest automaker, gained 3.5 percent to 37.15 euros. A gauge of carmakers made the second-biggest contribution to the Stoxx 600’s advance.
Johnson Matthey, which makes a third of all auto-catalysts, tumbled 5.8 percent to 2,190 pence, its lowest in almost four months, after it reported a 2.2 percent drop in first-half profit as platinum prices slid, and forecast “similar” results in the second six months of its fiscal year.
Net income was 145.7 million pounds ($232 million) in the six months ended Sept. 30, compared with 149 million pounds a year earlier, the London-based company said today.
Imagination Technologies (IMG) slipped 3.9 percent to 423.8 pence, its lowest level in almost a year. The U.K. chip designer in which Apple Inc. holds a minority stake said it will monitor the situation after MIPS said it got an unsolicited $75 million- proposal from CEVA to acquire its outstanding shares. MIPS had recommended a $60 million-bid from Imagination for the shares.
Siemens AG fell 1.3 percent to 77.60 euros after Deutsche Bank AG cut its rating on Europe’s largest engineering company to sell from hold, and reduced its price target on the shares to 65 euros from 75 euros, citing threats to its 2014 margin target, including low growth prospects.
Paragon Group Cos (PAG), the lender to British landlords, lost 1 percent to 238.3 pence after RBC Capital Markets downgraded the stock to sector perform from outperform. A 12-month target price of 260 pence per share was forecast for the stock. The company fell the most in nine weeks yesterday after analysts said its plan to increase dividends is too modest.
A gauge of resource companies was the second-worst performer of the 19 industry groups in the Stoxx 600. Lonmin Plc, the third-largest platinum producer, retreated 6 percent to 292.1 pence. Rio Tinto Group, the world’s third-largest mining company, fell 1 percent to 2,997 pence.
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