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European Stocks Close Higher Amid German Business Climate Report and U.S. Durable Goods
Written by article default Friday, 24 September 2010 13:04
Europe Session Key Developments* Stoxx Europe 600 Index Up After Three Days of Declines
* ARM Holdings Jump 4 percent
European Stocks Close Higher Amid German Business Climate Report and U.S. Durable Goods
European Markets closed in positive territory, erasing earlier losses after an unexpected rise in German business confidence and a rebound in demand for U.S. capital goods. Germany’s Ifo institute said its business climate index, based on a survey of 7,000 executives, climbed to 106.8 in September, the highest level since 2007. In the United States, a report showed that orders for capital equipment rebounded in August, signaling that business is continuing to invest at a high rate relative to analysts’ expectations. Bookings for goods, such as computers and communications gear, increased 4.1 percent after a 5.3 percent drop in July. Although total orders fell 1.3 percent, the report showed a gain of nearly twice that amount once transportation was excluded. The two reports eased investors’ concerns about a double-dip recession and facilitated a bullish view of the overall stock market. The benchmark Stoxx Europe 600 Index gained 1.1 percent, taking it to a weekly increase of 0.4 percent. The index had fallen the past three days as investors feared that Ireland and many other European countries would not be able to pay off their debt. National indexes gained in all 18 western European markets, excluding Iceland.
FTSE 100 5,598.48 +54.14 +1.98%
The FTSE 100 gained over 1 percent as 9 out of 10 sectors experienced positive gains throughout the trading session. The Technology and Industrial sectors led the gainers with advances of 2.65 and 1.78 percent respectively. ARM Holdings Plc jumped well over 4 percent as investors are speculating that Oracle Corp. may be interested in buying the company. The company was up 4.9 percent to 409.9 near the end of the trading day. Oracle’s CEO announced that the “company is looking to purchase semiconductor companies and makers of industry-specific software.”
CAC 40 3,782.48 +51.40 +0.93%
The CAC 40 gained close to one percent as all ten sectors experienced significant gains throughout the session. The Financials and Technology sector lead gains with 3.13 and 3.64 percent increases respectively. Cegedim SA fell 18 percent to 46.45 after the medical information-services provider announced that it will no longer aim to improve its margin for 2010. The company posted a 20 percent rise in net income for the first half of the year.
DAX 6,298.30 +113.59 +1.84%
The German market closed higher today after significant gains in Puma, Continental, and Merck KgaA. The market was also boosted after Germany’s Ifo institute announced that its business climate index reached the highest level since 2007. Adidas, the world’s second largest sporting goods maker, gained 5.1 percent after Nike announced a 25 percent surge in orders from China. Global orders for athletic shoes and clothes surged 10 percent between September and January. Shares of Puma AG advanced after Nike’s announcement as well, as over 20 percent of its revenue comes from the Asia-Pacific region. Continental jumped 6.9 percent to 56.91 Euros after Deutsche Bank raised its price estimate by 28 percent to 68 Euros.
IBEX 35 10,727.60 +226.10 +2.15%
The Consumer Services Sector led the advance for the Spanish Index with a 3.80% gain at the close of the session. Today’s rally marks the first gain for the index in two days. Cie Automative SA advanced 0.45 cents to 3.585 Euros after announcing its intent to merge with its biggest shareholder, Instituto Sectorial de Promocion y Gestion de Empresas SA. The company will create as many as 73.8 million new shares to swap for INSEEC stock. Gamesa Corporacion Tecnologica SA fell 3.2 percent after Banco Bilbao Vizcaya Argentaria SA said it sold a 5.6 percent stake in Gamesa Corporacion Tecnologica SA at 5.13 Euros each. Gamesa Corporacion Tecnologica lost 56 percent this year alone.
S&P/MIB 21,173.27 +326.73 +1.57%
Italian equities closed higher by more than one and a half percent as all ten sectors experienced significant advances. Banca Monte dei Paschi di Siena SpA rose for the first day in three after the company was upgraded to “outperform” from “neutral” at Credit Suisse Group AG. Compagnie Industriali Riunite SpA advanced 5.2 percent to 1.48 Euros, the largest gain since early May amid speculation that Silvio Berlusconi’s Fininvest SpA may pay reduced damages to the company as part of a legal case. Fiat SpA rose 3.1 percent to 11.14 Euros; the highest in more than 11 months after Goldman Sachs Group Inc. reiterated its “conviction buy” recommendation on the carmaker.
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