European Stocks Are Little Changed as Volkswagen Advances
Eni, Italy’s biggest oil company, climbed 1.3 percent. Volkswagen posted its biggest gain in 15 months as Europe’s largest carmaker said cost cutting contributed to higher earnings. TomTom NV added 3.4 percent after the Dutch maker of navigation systems raised its forecast for 2013. Belgacom SA dropped 5.3 percent as a competitor cut the price of its mobile-phone plans.
The Stoxx Europe 600 Index added less than 0.1 percent to 320.8 at the close of trading, after earlier climbing as much as 0.7 percent. The equity benchmark has advanced 3.3 percent this month as U.S. lawmakers agreed to lift the federal debt ceiling and investors speculated that a worse-than-forecast payrolls report would delay a reduction in the Fed’s bond-buying program.
“Investors are pricing in an earnings recovery for 2014,” said Francois Savary, who oversees about $9.5 billion as chief investment officer at Reyl & Cie. in Geneva. “People are buying European equities because of future expectations. Still, if there is no recovery in the U.S. and the economy continues to lose momentum, don’t expect a revival in Europe any time soon. This could be dangerous.”
U.S. companies added 130,000 workers in October, fewer than the 150,000 median projection in a Bloomberg survey of economists, according to a report from the ADP Research Institute today. That was the lowest reading since April. Businesses hired a net 145,000 people in September.
The Federal Open Market Committee meets for a second day to discuss monetary policy. The 16-day shutdown of the U.S. government earlier this month will reduce economic growth by 0.3 percentage points this quarter at an annual rate, according to a Bloomberg News survey of economists. The central bank will probably delay lowering its $85 billion in monthly bond purchases until March 2014, economists forecast in the survey. The Fed announces its decision after European markets close.
Eni rose 1.3 percent to 18.35 euros after the Italian oil producer posted adjusted net income of 1.17 billion euros ($1.6 billion) for the third quarter, more than the 998 million euros that analysts had predicted for the period.
Volkswagen gained 5 percent to 183.50 euros after posting quarterly earnings before interest and taxes that jumped 20 percent to 2.78 billion euros. That exceeded the average analyst estimate of 2.72 billion euros.
TomTom advanced 3.4 percent to 6.10 euros. The company forecast adjusted earnings of 25 euro cents a share this year. It had projected 20 euro cents apiece. TomTom also said that this year’s sales will approach the upper end of its 900 million euros to 950 million euros range.
Orkla ASA rallied 4.9 percent to 48.45 kroner. Operating profit for the Orkla Foods business rose to 364 million kroner ($62 million) in the period from 312 million kroner in 2012.
Belgacom declined 5.3 percent to 20.51 euros. Telenet Group Holding NV, which competes with Belgacom in Belgium, cut its prices for mobile-phone tariffs. A gauge of telecommunications stocks fell 0.8 percent for the second-worst performance among 19 industry groups on the Stoxx 600.
Standard Life Plc slipped 4 percent to 354.5 pence after reporting that its asset-management business received net inflows of 1.2 billion pounds in the three months through September, less than half the 2.6 billion pounds that it reported during the same period last year.
Fiat SpA (F) fell 2.2 percent to 5.70 euros, its lowest price since July. The Italian carmaker lowered its forecast for trading profit this year to 3.5 billion euros to 3.8 billion euros. It had projected earnings on that measure of as much as 4.5 billion euros. The company also posted third-quarter profit in Latin America that tumbled 52 percent to 165 million euros.
Pearson Plc declined 3.6 percent to 1,316 pence after forecasting that the margins for its education unit will drop in 2013 because of weaker demand for college textbooks. The publisher had forecast in July that the margins would be similar to those in 2012.
Viscofan SA sank 7.7 percent to 39.51 euros, its biggest drop since January 2008, after the Spanish maker of sausage casings said it will probably miss its targets for 2013 because of weak currencies. The company in July predicted net income of 107 million euros to 108 million euros and earnings before interest, taxes, depreciation and amortization of as much as 195 million euros for this year.
Piraeus Bank SA slid 9.8 percent to 1.48 euros after Banco Comercial Portugues SA sold 235 million shares in the Greek lender for 1.50 euros apiece. The Portuguese bank also sold the same number of warrants at 60 euro cents each.
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