European Stocks Are Little Changed; SAP Falls
European stocks closed little changed, with the Stoxx Europe 600 Index completing its fourth weekly gain, as investors weighed worse-than-estimated earnings from Google Inc. (GOOG) and Microsoft Corp.
Electrolux AB jumped 5.3 percent after raising its estimate for U.S. demand. Schibsted ASA rallied to the highest price in 21 years after posting profit that topped projections. SAP AG and ARM Holdings Plc led a gauge of technology shares to the worst performance on the benchmark gauge. Royal Vopak NV tumbled 5 percent after cutting its earnings forecast.
The Stoxx 600 added less than 0.1 percent to 299.85. The gauge gained 1.2 percent this week as Federal Reserve Chairman Ben S. Bernanke said the central bank remains flexible on the pace of asset purchases.
“We have had some pretty positive moves the last few weeks, so there is room for profit taking,” said Espen Furnes, who helps oversee about $75 billion as a fund manager at Storebrand Asset Management in Oslo. “We are seeing some weakness among technology stocks in Europe and Asia after the results from Microsoft and Google.”
A gauge of European technology companies fell 0.7 percent as Google Inc., owner of the world’s most popular Internet search engine, yesterday reported second-quarter sales and profit that missed analysts’ estimates. Microsoft Corp., the largest software maker, posted fourth-quarter profit that trailed forecasts by the biggest margin in at least a decade.
SAP, the biggest maker of business-management software, slid 2.3 percent to 55.73 euros. ARM Holdings, whose chip designs are used in phones that run on Google’s Android operating system, dropped 2.6 percent to 897.5 pence.
European shares briefly erased losses after the People’s Bank of China removed the floor on lending rates, effective tomorrow, giving freedom to banks to set borrowing costs. They were earlier allowed to lend at a maximum discount of 30 percent below the benchmark lending rate. China’s one-year rate has stayed at 6 percent since its last reduction in July 2012.
Electrolux gained 5.3 percent to 185.40 kronor. The world’s second-biggest maker of home appliances said demand for appliances in the U.S. may increase as much as 7 percent in 2013, having previously forecast growth of as much as 5 percent. The company also posted second-quarter net income of 642 million kronor ($98 million), missing the 669 million-kronor average estimate in a Bloomberg survey of analysts.
Schibsted ASA rallied 6.3 percent to 300.40 kroner, its highest price at least since July 1992, after posting second-quarter Ebitda of 555 million kroner ($93 million), exceeding the average analyst projection of 519 million kroner.
Tieto Oyj (TIE1V) dropped 3.1 percent to 15.01 euros as Finland’s biggest software producer reported second-quarter net income of 7.4 million euros ($9.7 million), less than half the 17.2 million euros estimated by analysts in a Bloomberg survey.
Royal Vopak NV tumbled 5 percent to 43.54 euros, its biggest drop since March 1, after the biggest chemical-and-oil storage company reduced its forecast for 2013 earnings before interest, taxes, depreciation and amortization to a range of 730 million euros to 780 million euros. It earlier predicted Ebitda to be between 760 million euros and 800 million euros.
Remy Cointreau SA slid 5 percent to 78.01 euros after JPMorgan Chase & Co. lowered its recommendation on the shares to underweight, a rating similar to sell, from neutral. The brokerage said a sales recovery may take longer than previously expected as the cognac maker yesterday reported a drop in first-quarter revenue.
Separately, a shareholder sold as many as 1.06 million shares, or a 2.1 percent stake, in Remy at 78.50 euros to 79.50 euros each.
Scania AB dropped 4.3 percent to 141.60 kronor after the Swedish truckmaker reported second-quarter earnings of 1.72 kronor a share, missing the average analyst forecast of 2.17 kronor.
To contact the reporter on this story: Namitha Jagadeesh in London at firstname.lastname@example.org
To contact the editor responsible for this story: Andrew Rummer at email@example.com