Europe Stocks Climb With S&P 500 Futures, Italian Bonds
Frankfurt (Oct 21) European stocks and U.S. equity-index futures climbed as results by companies from Apple Inc. (AAPL) to Swedbank AB beat analyst estimates and speculation grew the European Central Bank is buying bonds. Italian securities rallied while German bunds slid and the euro weakened.
The Stoxx Europe 600 Index climbed 1.4 percent at 7:27 a.m. in New York. Standard & Poor’s 500 Index futures added 0.7 percent. Apple Inc. gained 2.1 percent in pre-market trading. The yield on 10-year Italian bonds slid nine basis points to 2.50 percent and the rate on bunds increased three basis points to 0.88 percent. The euro slid 0.4 percent to $1.2748. West Texas Intermediate oil advanced 0.6 percent to $83.19 a barrel.
Apple gained after forecasting revenue for the holiday quarter that topped estimates and Swedbank, Sweden’s biggest mortgage lender, said it plans to cut jobs to adjust to a low-rate environment. The ECB bought Italian covered bonds as it returned to the market for a second day under its asset purchase program, according to two people familiar with the matter. Debt issued by Intesa Sanpaolo SpA was included in the purchases, according to one of the people.
“The focus may go back to the micro, the corporate, as we get into the meat of the reporting season,” James Buckley, who helps oversee about $48 billion as a money manager at Baring Asset Management Ltd. in London, said by telephone. The quarter “may be tough because of the global and geopolitical uncertainty, but guidance will be crucial,” he said.
Global Rout
More than $4 trillion has been erased from the value of equities worldwide the past six weeks amid concern the global economy is slowing. Deepening concern over the advance of Islamic militants in Syria and the spread of the Ebola virus also rattled investor sentiment.
About 20 shares rose for every one that declined in the Stoxx 600, with trading volumes 50 percent greater than the 30-day average, according to data compiled by Bloomberg. Swedbank gained 3.1 percent. Swiss drugmker Actelion Ltd. jumped 4.7 percent, raising its full-year forecast for a second time after earnings beat estimates.
Royal Dutch Shell Plc climbed 1.7 percent and BP Plc gained 1.9 percent. Total SA also advanced 1.9 percent. Total’s Chief Executive Officer Christophe de Margerie died in a Moscow plane crash.
Earnings Scorecard
Reckitt Benckiser Group Plc lost 1.8 percent after saying full-year sales growth will be at the lower end of its forecast.
Coca-Cola Co., McDonald’s Corp. and Verizon Communications Inc. are among companies reporting results today. About 76 percent of S&P 500 companies that have posted quarterly earnings this season have topped analysts’ estimates for profit, while 61 percent beat sales projections, data compiled by Bloomberg show.
AbbVie Inc. climbed 1.3 percent. After scrapping a merger with Shire Plc, the U.S. drugmaker announced a $5 billion share buyback over the next several years and increased its quarterly dividend by 17 percent, to 49 cents per share.
The MSCI Emerging Markets Index was little changed after two days of gains. Benchmark gauges in Russia, India, South Africa, Turkey, Poland and Abu Dhabi advanced at least 0.6 percent.
The Hang Seng China Enterprises Index (HSCEI) of mainland companies listed in Hong Kong slipped 0.2 percent and the Shanghai Composite Index dropped 0.7 percent on speculation economic data bolstered the government’s case for avoiding broader stimulus measures.
A report today showed China’s economy expanded 7.3 percent in the third quarter from a year before. While that beat the estimate of 7.2 percent in a Bloomberg survey, it was still the slowest pace since 2009.
Brent climbed 0.6 percent to $85.95 a barrel.
Source: Bloomberg
