European Stocks Rebound From Last Week’s Drop
By Tom Stoukas - Apr 22, 2013
European stocks rose, rebounding from the biggest weekly drop in five months, as Italy elected a president and the Group of 20 refrained from opposing the Bank of Japan’s stimulus policies. Asian shares and U.S. index futures also advanced.
ABB Ltd. (ABBN) increased 1.1 percent after saying it will acquire Power-One Inc. for about $1 billion. Delhaize Group SA gained 7.8 percent as its pretax profit forecast beat analysts’ estimates. Royal Philips Electronics NV (PHIA) slid for a seventh day after revenue and profit missed analysts’ estimates.
The Stoxx Europe 600 Index (SXXP) climbed 0.7 percent to 287.07 at 8:07 a.m. in London. The benchmark gauge retreated 2.5 percent last week as economic data from the U.S. to China and Germany missed forecasts. The measure has still risen 2.7 percent so far this year.
“U.S. markets closed higher on Friday, buoyed by a host of decent results from companies and optimistic expectations that this week’s bellwethers will do the same,” Jonathan Sudaria, a trader at Capital Spreads in London, wrote in e-mailed comments. “Japan’s optimism seems to be founded on the fact that they didn’t receive any explicit singling out at the G-20 for their exceptionally loose monetary policy.”
Standard & Poor’s 500 Index futures rose 0.6 percent today, signaling the benchmark measure will advance for a second day. The MSCI Asia Pacific Index climbed 0.6 percent, led by Japanese exporters as the yen slid to a four-year low against the dollar.
Italy Elections
Italian bonds rose today, pushing the yield on the two-year notes down seven basis points to 1.267 percent, the lowest since Bloomberg began compiling the data in 1993.
Giorgio Napolitano was elected to a second term as Italy’s president after accepting a last-minute appeal from party leaders to run again. The 87-year-old incumbent won the backing of parties led by former premier Silvio Berlusconi, caretaker Prime Minister Mario Monti and outgoing Democratic Party leader Pier Luigi Bersani. His re-election came after two months after inconclusive parliamentary elections.
BOJ Governor Haruhiko Kuroda emerged from the G-20 meeting saying he was emboldened to press ahead with the campaign to defeat deflation. The central bank meets this week after pledging April 4 to double the monetary base in two years.
U.S. Earnings
In the U.S., eight S&P 500-listed (SPX) stocks, including Halliburton Co., Caterpillar Inc. and Hasbro Inc. release their results today.
Existing home sales in the U.S. rose for a third month in March, increasing 0.4 percent to a 5 million annualized rate, according to a Bloomberg survey of economists. The last time sales exceeded that pace was November 2009, when first-time homebuyers rushed to take advantage of a temporary tax credit.
ABB gained 1.1 percent to 20.14 Swiss francs. The Swiss maker of power-transmission equipment agreed to acquire Power- One for about $1 billion to expand in solar inverters. Shareholders of the Camarillo, California-based company will get $6.35 a share under the terms of the offer, ABB said.
Delhaize added 7.8 percent to 45.99 euros. First-quarter preliminary results showed earnings before interest and taxes at about 214 million euros, up 13 percent from the same time last year. The the owner of the Food Lion supermarkets in the U.S. sees 2013 underlying pretax profit at about 775 million euros, beating analysts’ estimates of 741.5 million euros.
Copper producer Kazakhmys Plc (KAZ) rose 2.6 percent to 395.6 pence. The stock was raised to neutral from underperform at Credit Suisse Group AG and Exane BNP Paribas.
Philips slid 2.9 percent to 21.03 euros after it reported first-quarter profit that missed analysts’ forecasts. Earnings before interest, taxes, amortization and one-time items were 421 million euros, the world’s largest lighting manufacturer said, missing estimates of 441 million euros. Sales dropped 0.9 percent to 5.26 billion euros, trailing the 5.48 billion-euro analyst projection.
To contact the reporter on this story: Tom Stoukas in Athens at astoukas@bloomberg.net
To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net
