European Stocks Rise for Eighth Day as Philips, Akzo Gain
European stocks gained for an eighth day as companies from Royal Philips NV to Akzo Nobel AG reported profit that beat estimates and investors speculated the Federal Reserve may maintain stimulus measures into next year.
Philips, the world’s biggest lighting manufacturer, and Akzo Nobel, the Dutch maker of Dulux paint, jumped more than 5 percent. Actelion Ltd. rallied to a six-year high as its lung drug Opsumit won U.S. approval. SAP AG added 4.8 percent after the maker of business-management software posted increased third-quarter earnings and reiterated its full-year forecast.
The Stoxx Europe 600 Index advanced 0.3 percent to 319.54 at the close of trading, the highest level since June 2008. The gauge has risen 2.9 percent this month as U.S. lawmakers agreed to extend the government’s borrowing authority until 2014 and ended the first partial government shutdown in 17 years.
“While we saw a variety of profit warnings earlier in the earnings season, we’re also seeing some good numbers now,” Andrew Parry, who manages about 2 billion euros ($2.73 billion) at Hermes Sourcecap Ltd. in London, said by phone. “While the recession has receded in Europe and we’re seeing a bit of growth recovery, it has not benefited all companies equally. It remains a stockpicker’s market.”
National benchmark indexes climbed in 16 of the 18 western European markets. The U.K.’s FTSE 100 (UKX) added 0.4 percent for an eighth day of gains while France’s CAC 40 fell 0.2 percent. Germany’s DAX was little changed.
In the U.S., the Fed will maintain its monthly bond-buying program until March after a 16-day government shutdown trimmed fourth-quarter economic growth by 0.3 percentage point and disrupted the flow of data, according to the median forecast of economists in a Bloomberg survey conducted Oct. 17-18. Policy makers will taper asset purchases to $70 billion from $85 billion, the poll forecast.
A previous survey had indicated the U.S. central bank would start trimming stimulus measures at last month’s gathering. The policy-setting Federal Open Market Committee’s last two meetings this year are scheduled for Oct. 29-30 and Dec. 17-18.
A release tomorrow may show U.S. payrolls increased by 180,000 in September, after gaining 169,000 a month earlier, economists forecast. The government shutdown delayed the Labor Department data originally due on Oct. 4.
Philips climbed 5.3 percent to 25.73 euros, its highest price since July 2010. The company said third-quarter earnings before interest, taxes, amortization and one-time items rose to 634 million euros, compared with the 567 million-euro average estimate of analysts in a Bloomberg survey.
Akzo surged 6.6 percent to 51.63 euros, its biggest gain since December, after saying earnings before interest, taxes, depreciation and amortization climbed 7 percent to 456 million euros. Analysts on average had estimated 444 million euros.
Actelion jumped 5.9 percent to 68.40 Swiss francs, the highest since October 2007. The U.S. Food and Drug Administration said late Oct. 18 that it approved the use of Opsumit once daily for treating pulmonary arterial hypertension.
SAP added 4.8 percent to 56.06 euros after saying third-quarter operating profit adjusted for some items rose to 1.3 billion euros as revenue from the Hana database product surged 79 percent. The world’s largest maker of business-management software reiterated a July forecast for double-digit percentage growth for software-related services sales this year, excluding currency swings.
“With SAP, people had baked in a lot of fears about a warning that didn’t come to pass, so that was positive,” Hermes Sourcecap’s Parry said.
G4S Plc advanced 3.5 percent to 250.5 pence after people familiar with the matter said private-equity firm Charterhouse Capital Partners LLP is considering an offer of 1 billion pounds ($1.6 billion) for the cash-solutions business of the world’s biggest security-services provider.
Royal Bank of Scotland Group Plc, the largest state-owned British lender, tumbled 5.3 percent to 353.1 pence, its biggest drop since June. The U.K. government will decide by November whether to spin off RBS’s toxic assets into a so-called bad bank, the Daily Telegraph reported, citing an interview with Chancellor of the Exchequer George Osborne.
Tod’s SpA (TOD) slipped 2.7 percent to 124.90 euros and Hugo Boss AG fell 2.1 percent to 93.51 euros after Goldman Sachs Group Inc. downgraded both stocks to sell from neutral.
A rally in Tod’s over the past six months has overshot the earnings outlook, Goldman Sachs analysts led by William Hutchings wrote in a report. Tod’s, which owns stakes in leather-goods maker Sant’Espidio a Mare and New York-based retail chain Saks Inc., surged 22 percent from a June 24 low through the close on Oct. 18, compared with 8.6 percent for the Stoxx 600 Personal & Household Goods Index.
Hugo Boss is “less well-placed to capture incremental growth in the luxury-goods sector,” according to the report.
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