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Morning Traders! European Stocks Climb, Led by Barclays, ING; U.S. Futures Rise
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By Adam Haigh

Jan. 26 (Bloomberg) -- European stocks gained as Barclays Plc and ING Groep NV reassured investors that they are taking steps to stem credit-related losses. Japanese shares fell, while U.S. index futures advanced.

Barclays rallied 53 percent after saying its investment bank and the Lehman Brothers Holdings North American assets acquired last year are driving profit, and “record revenue” will cover writedowns. ING Groep NV climbed 21 percent on plans to slash costs by 1 billion euros ($1.3 billion) in 2009. Royal Philips Electronics NV rose 6 percent after maintaining its dividend. Wolseley Plc sank 28 percent on lower earnings.

The Dow Jones Stoxx 600 Index added 1 percent to 184.32 at 10:34 a.m. in London. In Japan, the Nikkei 225 Stock Average Index fell 0.8 percent as Komatsu Ltd. tumbled. Futures on the Standard & Poor’s 500 Index expiring in March rose 0.5 percent.

“Visibility has been the big problem,” for banks, said Jane Coffey, head of equities at Royal London Asset Management Ltd., which manages about $10.5 billion. For banks like Barclays to “emphasize that their position is strong is good for sentiment in the market,” she told Bloomberg Television.

Barclays rallied 53 percent to 78.4 pence. The U.K. bank that last year turned down funding from the government said it won’t need to raise money after writing down 8 billion pounds ($11 billion). The bank exceeds regulators’ capital requirement by 17 billion pounds, the lender said.

ING added 21 percent to 6.394 euros after the biggest Dutch financial-services company said it will cut 7,000 jobs as it seeks to reduce operating expenses. The lender said it will replace Chief Executive Officer Michel Tilmant after reporting its second consecutive quarterly loss.

Earnings Outlook

Banks were among the biggest decliners in the Stoxx 600 last week amid concern they need to raise further capital. Earnings at financial companies in the measure are expected to rise 48 percent in 2009 following a 61 percent slump last year, according to estimates compiled by Bloomberg.

Philips, Europe’s largest maker of consumer electronics, rose 6 percent to 13.36 euros after saying it will pay a dividend of 70 cents a share, unchanged from last year.

Wolseley tumbled 28 percent to 205.5 pence after the world’s biggest distributor of plumbing gear said pretax profit fell 66 percent in the first five months of its financial year, while net debt rose 22 percent.

Profits at companies in the Stoxx 600 will decrease 2.2 percent on average this year following a 17 percent slump in 2008, estimates compiled by Bloomberg show. In the U.S., profits at companies on the S&P 500 will slip 5.4 percent this year after a 14 percent drop last year.

‘Dismal’ Results

The first round of earnings releases were “dismal” and economic data has remained “bleak,” JPMorgan Chase & Co. analysts led by Srini Ramaswamy in New York wrote in a report dated Jan. 23.

Xstrata Plc, Europe’s largest zinc producer, slid 2.5 percent to 663 pence as Citigroup Inc. downgraded the shares to “sell” from “hold,” citing the economic slump and lower commodity prices.

In Japan, Komatsu sank 4.7 percent to 909 yen after cutting its earnings forecast. On Jan. 23, the world’s second-biggest maker of construction equipment lowered its profit estimate for the year ending in March to 110 billion yen ($1.2 billion) from 190 billion yen, citing sudden sales declines in China and other emerging markets. Rival Hitachi Construction Machinery Co. lost 3.9 percent to 861 yen.

“The market is very cautious and companies are the same,” said Christian Gattiker, head of equity research and strategy at Bank Julius Baer & Co. “The current environment is making them very uncertain about the next few months,” he told Bloomberg Television. The bank manages about $307.6 billion.