European stocks advanced for a seventh day, the longest stretch of gains since August 2007, as William Morrison Supermarkets Plc led a rally by retailers.
Morrison jumped 7.3 percent after saying earnings will beat its forecasts. Actelion Ltd., Switzerland’s biggest biotechnology company, added 4.3 percent after raising its sales and profit outlook for the year. Nokia Oyj slipped 1.7 percent after Morgan Stanley recommended selling shares of the world’s largest maker of mobile phones.
Europe’s Dow Jones Stoxx 600 Index added 0.4 percent to 214.06 at 8:59 a.m. in London. The measure has climbed 8.6 percent since July 10 after companies from Goldman Sachs Group Inc. to Johnson & Johnson reported results that beat analysts’ estimates and the Conference Board’s gauge of the U.S. economic outlook increased for a third straight month.
‘Going forward, we should make gains,” said Jeremy Beckwith, who oversees $9.9 billion as chief investment officer at Kleinworth Benson in London. “Data is showing that later this year and next year economic growth is returning.”
Futures on the Standard & Poor’s 500 Index slipped 0.2 percent today before earnings reports from Caterpillar Inc., the world’s biggest maker of construction equipment, and Apple Inc., maker of the iPhone. Analysts estimate profits for companies on the S&P 500 fell an average 33 percent in the second quarter and will decrease 20 percent from July through September, according to Bloomberg data.
The MSCI Asia Pacific Index advanced 1.5 percent after Australian Treasurer Wayne Swan said the global economy may have bottomed.
CIT Group
The S&P 500 yesterday climbed to its highest level since November, as a gauge of future economic growth topped projections and speculation grew that CIT Group Inc. will avoid bankruptcy. CIT announced an agreement with bondholders to provide the emergency financing late yesterday, keeping the 101- year-old commercial finance company out of bankruptcy.
Even so, CIT’s $3 billion financing pledge from bondholders may fail to shield the commercial lender from about $10 billion of debt maturing through next year, mounting loan defaults and a shrinking market share.
Credit Suisse Group AG switched its preference for government bonds in favor of stocks and raised its estimate for the S&P 500 by 14 percent to 1,050, citing improving economic indicators and earnings. Investors should increase holdings of global equities to “overweight” and reduce government bonds to “benchmark,” reversing a decision made in June, according to London-based global strategist Andrew Garthwaite.
Morrison, Actelion
Morrison soared 7.3 percent to 271.75 pence. The smallest of the four main U.K. food retailers, said full-year results will be “ahead of its earlier expectations” after taking sales away from its larger competitors.
A gauge of retailers increased 1.1 percent for the biggest gain among 19 industry groups on the Stoxx 600.
Actelion advanced 4.3 percent to 59.95 Swiss francs. Switzerland’s largest biotechnology company said sales and cash earnings before interest and taxes in local currencies will rise 16 percent to 19 percent this year. Previously Actelion had forecast a 12 percent to 15 percent increase in revenue and a 10 percent to 12 percent gain in earnings.
Nokia slid 1.7 percent to 9.11 euros. Morgan Stanley downgraded the shares to “underweight” from “overweight,” citing rising competition.
British Airways Plc added 1.5 percent to 134.8 pence. Europe’s-third largest airline was raised to “buy” from “sell” at Goldman Sachs Group Inc., which said “there are signs that revenue is at least stabilizing.”
Source: www.bloomberg.com.
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