European Stocks Are Little Changed; Telecinco Shares Surge
European stocks were little changed, with the Stoxx Europe 600 Index rallying for the first October in three years, as Gestevision Telecinco SA received approval to acquire a rival, offsetting a slump by Sandvik (SAND) AB.
Telecinco surged 6.9 percent after Spain’s antitrust regulator approved the broadcaster’s purchase of free-to-air rival Cuatro. Sandvik retreated 4.3 percent as the world’s biggest maker of metal-cutting tools posted profit that missed analysts’ predictions. Piraeus Bank SA sank 4.4 percent after the Greek bank announced plans to raise 800 million euros ($1.11 billion) in a sale of new shares to boost its capital.
The Stoxx 600 was little changed at 265.96 at the 4:30 p.m. close in London, falling 0.3 percent this week. Even so, the measure has climbed 2.4 percent this month as investors speculated that the U.S. Federal Reserve will unveil another round of bond purchases at its November meeting, a tactic for boosting economic growth known as quantitative easing.
“Short term, there is perhaps a small risk that financial markets have now priced in the success of quantitative easing,” Michael O’Sullivan, head of global asset allocation at Credit Suisse Private Banking, said on Bloomberg Television’s “On The Move” with Francine Lacqua. “There are some question marks as to whether it will work as well as many people think.”
The U.S. economy grew at a 2 percent annual rate in the third quarter as consumer spending climbed the most in almost four years. The increase in gross domestic product matched the median forecast of economists surveyed by Bloomberg News and followed a 1.7 percent gain in the previous three months, Commerce Department figures showed today in Washington.
Of the 144 companies in the Stoxx 600 that have announced results since Oct. 7, 68 percent have beaten analyst estimates for per-share income, according to data compiled by Bloomberg. In the U.S., 80 percent of S&P 500 companies have topped predictions in the period, the data show. Net income has grown 36 percent in the U.S. as sales have increased 9.8 percent.
National benchmark indexes fell in 11 of the 18 western European markets. The U.K.’s FTSE 100 Index and France’s CAC 40 Index were little changed, while Germany’s DAX Index climbed 0.1 percent.
Gestevision Telecinco SA (TL5) rallied 6.9 percent to 9.17 euros, the biggest advance since May. Spain’s antitrust regulator approved Telecinco’s planned purchase of Promotora de Informaciones SA’s free-to-air channel Cuatro. The National Competition Commission will still review Prisa’s plan to sell stakes in its Digital Plus unit to Telecinco and Telefonica SA.
Ferrovial SA (FER) advanced 3.3 percent to 8.19 euros after the manager of airports and highways posted a nine-month profit of 315 million euros, compared with a loss of 191 million euros a year earlier. Sales grew 0.3 percent to 9.1 billion euros. The company will pay a 2010 interim dividend of 12 euro cents per share next month.
Bayerische Motoren Werke AG, the world’s biggest maker of luxury cars, gained 3.3 percent to 51.51 euros after Goldman Sachs Group Inc. upgraded the shares to “buy” from “neutral,” estimating strong sales growth.
AZ Electronic Materials SA, the chemical maker partly owned by Carlyle Group, rallied 6.3 percent to 255 pence in the first day of trading after its 383 million-pound ($613.3 million) initial public offering.
Sandvik sank 4.3 percent to 100.70 kronor as the company reported third-quarter net income of 1.58 billion kronor ($235.7 million), compared with the average analyst’s estimate of 1.72 billion kronor, according to a survey compiled by Bloomberg.
Piraeus Bank (TPEIR) slumped 4.4 percent to 3.74 euros. Greece’s fourth-biggest bank will hold a meeting on Nov. 23 to seek shareholder approval to sell new shares in January.
Spyker Cars NV tumbled 17 percent to 3.26 euros after the Dutch supercar maker that bought Saab Automobile AB this year cut the Swedish unit’s production goal as its own third-quarter loss widened.
DSV A/S (DSV), the Nordic region’s biggest trucking company, slid 2.3 percent to 109.80 kroner as it reported third-quarter net income of 319 million kroner ($59.4 million), missing the 356 million-krone average estimate in a Bloomberg survey of nine analysts.
Eutelsat Communications sank 1.7 percent to 26.99 euros, the lowest price since July, after reporting the loss of a satellite because of “an anomaly” detected on the propulsion subsystem.
To contact the reporter on this story: Adam Haigh in London at email@example.com