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Wednesday, 24 July 2013
European Stocks Advance as Volvo, EasyJet Shares Jump
By Sofia Horta e Costa - Jul 24, 2013 12:06 PM GMT+0400
European stocks rose, rebounding from yesterday’s first drop in five days, as data signaled euro-area manufacturing is expanding for the first time in two years and companies from Volvo AB to EasyJet Plc posted results. U.S. index futures gained and Asian shares were little changed.
Volvo gained 3.1 percent as the world’s second-largest truckmaker reported operating profit that beat estimates. EasyJet jumped 5.3 percent after saying quarterly sales rose 11 percent on higher capacity utilization and revenue per seat. Syngenta AG (SYNN) fell 3.9 percent after the biggest maker of crop chemicals posted first-half profit and revenue below forecasts.
Financial traders monitor data on computer screens beneath a display of the DAX Index curve at the Frankfurt Stock Exchange in Frankfurt. Photographer: Ralph Orlowski/Bloomberg
The Stoxx Europe 600 Index added 0.5 percent to 300.85 at 9:06 a.m. in London. The gauge declined yesterday as a measure of U.S. manufacturing unexpectedly slumped. Standard & Poor’s 500 Index futures rose 0.2 percent today, while the MSCI Asia Pacific Index fell 0.1 percent.
“I’ve been positively surprised by the earnings season so far,” said Michael Woischneck, who helps oversee about $9.3 billion at Lampe Asset Management in Dusseldorf, Germany. “Companies are holding up quite well and guidance from CEOs seem to show they are confident with their road maps ahead. I’m not saying I expect the next big boom in Europe, but there are signs that the economy is not getting worse.”
Preliminary data today showed euro-area manufacturing is expanding this month for the first time since July 2011. A manufacturng index based on a survey of purchasing managersincreased to 50.1 from 48.8 in June, Markit Economics said. Economists in a Bloomberg survey had predicted 49.1. A reading of 50 is the dividing line between expansion and contraction.
In Germany, manufacturing unexpectedly expanded in July and services growth accelerated, signaling that the recovery in Europe’s largest economy is building momentum.
In the U.S., Commerce Department data may show purchases of new houses increased to a 484,000 pace last month, the highest level since June 2008, according to the median forecast in the Bloomberg survey.
Volvo gained 3.1 percent to 96.10 kronor. Earnings before interest and taxes fell to 3.26 billion kronor ($505 million) in the second quarter, from 7.71 billion kronor a year earlier. Profit beat the 3.22 billion-kronor average by analysts in a Bloomberg survey.
EasyJet rose 5.3 percent to 1,407 pence after saying sales rose to 1.14 billion pounds ($1.75 billion) in the third quarter. The low-cost carrier said in an interim statement that it predicts second-half revenue per seat to increase by as much as 6 percent from a year earlier, assuming constant currency levels.
ARM Holdings Plc, which designs chips used in Apple Inc.’s devices, advanced 2.7 percent to 922.5 pence. Revenue increased 26 percent to 171.2 million pounds in the second quarter, beating the 165.1 million pounds predicted by analysts, as demand grew for advanced graphics and processing technology.
Syngenta fell 3.9 percent to 371.40 Swiss francs after posting first-half adjusted earnings of $15.92 a share, which missed the average analyst projection for $17.15. Revenue increased to $8.39 billion, less than the $8.64 billion forecast by analysts.
The number of shares trading hands in Stoxx 600-listed companies was 21 percent lower than the average of the past 30 days, data compiled by Bloomberg shows.