European Stocks Are Little Changed Before U.S. Reports

By Sarah Jones - Apr 3, 2013 2:45 PM GMT+0400

European stocks were little changed, after yesterday’s biggest rally for the region’s benchmark index in four weeks, as investors awaited reports on U.S. employment and services industries. U.S. futures and Asian shares climbed.

Vodafone Group Plc (VOD) lost 2.1 percent after Verizon Communications Inc. denied it’s considering a bid for the U.K. company. Kazakhmys Plc fell to its lowest price in four years as metal prices retreated. Rexel SA climbed 2.1 percent in Paris after Goldman Sachs Group Inc. recommended buying the shares.

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A telephone handset rests on a desk in front of computer screens displaying financial data at a brokerage in London. Photographer: Matthew Lloyd/Bloomberg

The Stoxx Europe 600 Index (SXXP) retreated 0.1 percent to 297.38 at 11:40 a.m. in London after climbing 1.3 percent yesterday on better-than-estimated U.S. factory orders data. Standard & Poor’s 500 Index futures added 0.2 percent today, while the MSCI Asia Pacific Index gained 0.6 percent.

“We were certainly calling for a correction in developed markets,” Stewart Richardson, chief investment officer at RMG Wealth Management LLP, told Francine Lacqua on Bloomberg Television in London. “We worry there is a bit of a slowdown in terms of economic growth coming and certainly a continued slowdown in corporate earnings. When the market has moved as much as it has from autumn of last year, it is probably time for a bit of a pause.”

U.S. service industries, which account for about 90 percent of the economy, grew at a slower pace last month, data due at 10 a.m. New York time may show. The Institute for Supply Management’s non-manufacturing index slipped to 55.5 in March from 56 in February, according to the median economist estimate. Readings above 50 indicate expansion.

ADP Payrolls

A separate from the ADP Research Institute due at 8:15 a.m. may show companies added 200,000 workers in March. The data come ahead of Friday’s non-farm payrolls report from the Labor Department.

Vodafone led a gauge of phone companies lower, falling 2.1 percent to 187.9 pence, after Verizon denied a Financial Times report that said it had discussed a plan with AT&T Inc. to make a joint offer for the U.K. telecommunications operator.

While Verizon reiterated interest in buying Vodafone’s stake in the companies’ Verizon Wirelessjoint venture, it doesn’t currently plan to bid for the whole company, according to a filing yesterday.

Telecom Italia SpA lost 3.3 percent to 54.8 euro cents and France Telecom SA retreated 3.5 percent to 7.73 euros. UBS AG downgraded both phone companies to sell from neutral late yesterday, citing the downside risk to earnings for Telecom Italia, and more cost cutting by competitors for France Telecom.

Mining Companies

A gauge of commodity producers slipped 1.4 percent, for the biggest decline among the 19 industry groups on the Stoxx 600. Kazakhmys dropped 6.6 percent to 345 pence, extending the copper producer’s selloff since March 20 to 29 percent. Evraz Plc fell 6 percent to 203.6 pence and Eurasian Natural Resources Corp. retreated 5.4 percent to 222.6 pence.

Copper fell for a fourth day on the London Metal Exchange. Gold also declined, sliding to the lowest price in more than three weeks.

Rexel (RXL) climbed 2.1 percent to 17.72 euros after Goldman Sachs raised its recommendation for the French electric equipment distributor to buy from neutral, citing an acceleration in the U.S. commercial market.

L’Oreal SA (OR) climbed 1.1 percent to 128.70 euros after Exane BNP Paribas added the world’s largest cosmetics maker to its key ideas list and increased its price estimate to 167 euros. Analysts including Jeff Stent said Nestle SA will sell its 30 percent stage in L’Oreal for more than the market anticipates.

Neste Oil

Neste Oil Oyj (NES1V) gained 4.6 percent to 12.02 euros. CA Cheuvreux SA upgraded Finland’s only refiner to outperform, the equivalent of a buy recommendation, from underperform, saying it expects it to report resilient first-quarter results this month.

Pennon Group Plc added 3 percent to 644 pence as the U.K.’s Daily Mail cited speculation that Abu Dhabi Investment Authority may be interested in the British water company. The newspaper didn’t identify its sources.

Panalpina Welttransport Holding AG soared 12 percent to 94.10 Swiss francs after the freight-forwarding company appointed Peter Ulber as chief executive officer, replacing Monika Ribar.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net