European Indexes Up; Banco Santander Net Falls, Daimler Profit Surges

Arthi Gupta
28 Oct, 2010
New York City

The European indexes rose after strong earnings. Euro-zone economic confidence rose in October. German jobless rate fell in the month and wholesale turnover rose in the third quarter. French PPI rose in September. Daimler AG earnings surged driven by higher unit sales.

[R]4:00 PM Frankfurt – The European indexes rose after strong earnings. Euro-zone economic confidence rose in October. German jobless rate fell in the month and wholesale turnover rose in the third quarter. French PPI rose in September. Daimler AG earnings surged driven by higher unit sales.[/R]

U.S. stocks gained after weekly jobless claims fell more than expected and Asian markets traded mixed.

Sweden retail sales improved in September. Hungarian jobless rate falls in the third quarter. Galapagos NV won €3.7 million grant from the Flemish agency.

Sanofi-Aventis profit rose driven by strong sales in emerging markets and Banco Santander net declined due to the impact of one-off provisions as a result of a change in the Bank of Spain''s regulations on provisions. The bank also said it will miss its 2010 profit goal after making provisions to adjust for the rules.

Bundesbank president Axel Weber said in a speech delivered at Eltville that the recent appreciation of the Chinese renminbi is a welcome further step towards appropriate valuation. He added market-oriented exchange rates that reflect underlying economic fundamentals contribute to global economic stability.

In another report, the European Central Bank Executive Board member Juergen Stark said in a panel discussion in Frankfurt today that money market situation in the euro-zone continues to improve, though normalization has not completed.

Stark said the ECB''s current monetary policy is appropriate from today''s perspective, but maintaining low interest rate for a long term poses risks.

The European Central Bank Governing Council member Mario Draghi said that imbalances in the foreign exchange rates risks global economic recovery. He noted that some countries have used currency market intervention to support exports. This has widened imbalances in international payments.

The latest quarterly Bank Lending Survey from the European Central Bank showed that demand for loans from enterprises in the euro area increased in the third quarter. The net demand for loans from enterprises turned positive in the third quarter to 7% from negative 2% in the second quarter, first positive balance in more than two years.

The European Bank for Reconstruction and Development raised the growth outlook for the emerging European nations, while predicting a weak recovery for southeastern countries. EBRD projects 4.2% expansion for Emerging Europe this year, higher than the July''s prediction of 3.5%. The bank also lifted the forecast for next year to 4.1% from 3.9%.

In Paris CAC 40 Index increased 36.39 0.95% to close at 3,852.16 and in Frankfurt DAX Index edged higher 55.92 or 0.85% to close at 6,623.92.

Economic confidence in the euro area rose to its highest level in nearly three years during October, the European Commission said today. The commission said its main economic sentiment indicator rose to 104.1 in October from 103.2 in September. The main reason behind the improvement was a lesser negative assessment of conditions in the industry and construction sectors.

The commission said business sentiment rose more than expected to 0.98 in October from 0.76 in September.

German wholesale turnover increased 13.7% on an annual basis in the third quarter in nominal terms, the Federal Statistics Office said today. In real terms, turnover increased 7.1%. Compared with the previous year, turnover in wholesale trade increased 11.4% in nominal terms and 6.7% in real terms in the first nine months of 2010, the statistics office said.

German unemployment fell below the three-million mark to reach the lowest level in two decades, according to figures released by the Labor Agency today.

The non-seasonally adjusted number of unemployed declined 86,000 to 2.95 million in October and the unadjusted unemployment rate fell to 7% in October from 7.2% in September.

After seasonal adjustment, the number of unemployed dropped much less than expected. The figure declined 3,000 and the total number of unemployed was 3.15 million in October. The seasonally adjusted unemployment rate remained unchanged at 7.5%.

In yet another report, German''s unemployment according to the concept of the International Labor Organization decreased a seasonally adjusted 390,000 persons or 11.8% annually to 2.87 million in September, the Federal Statistics Office said today.

The number of employed persons in Germany was 40.7 million in September, an increase of 355,000 or 0.9% from a year ago.

The producer price index for the French market rose 4.2% annually in September, statistics office Insee said today. Food, beverages and tobacco producer prices rose 1.4% in September. On a monthly basis, the domestic PPI climbed 0.3% in September.

Swedish retail sales increased in September from August, the Statistics Sweden said today. Retail sales grew a seasonally adjusted 0.8% on a monthly basis in September, following a 0.1% rise in August. Retail sales for consumables rose 0.7%, while durable goods sales increased 9.5% in September.

Hungary''s jobless rate dropped to 10.9% during the three months to September from 11% recorded during the three-month through August, the Hungarian Statistics Office said. The number of unemployed in the country decreased to 465,700 during the period from 470,600 in the three months through August.

Iceland''s producer price index rose 1.4% annually in September, as against a 1.8% growth in August. A year earlier, producer price inflation was 12.4%.

On a monthly basis, producer prices grew 2.3% in September, compared to a 0.9% fall in August. Domestic sales prices fell 0.5%, but export product prices rose 3.1% in September.

Galapagos NV said it won €3.7 million grant from the Flemish agency for Innovation by Science and Technology or IWT. Galapagos stated that it aims to develop disease-modifying agents with clear efficacy benefits relative to existing cystic fibrosis therapies, which only treat the symptoms of the disease.

Evotec AG said it entered into a license and collaboration agreement with Zhejiang Jingxin Pharmaceutical Co., Ltd. for EVT 201, a novel potential treatment for insomnia. The agreement grants Jingxin Pharma exclusive rights to develop and market the drug candidate in China. In return, Evotec will receive a small upfront payment, together with commercial milestones and significant royalties.

Gainers & Losers

ABB dropped 1.75% to $21.85 after the Swedish power and automation technology company reported third quarter revenues edged lower 0.1% to $7.90 billion, compared to $7.91 billion in the prior-year quarter. Net income in the quarter declined 25% to $774 million, from $1.034 billion in the corresponding quarter a year earlier.

ACE Limited dropped 1.32% to $60.45 after the insurance company reported third quarter net income rose 37% to $675 million or $1.97 per share from $494 million or $1.46 last year on lower net realized losses, with earnings coming in ahead of estimates. Net investment income rose 1% to $516 million.

Acerinox, S.A. fell 2.22% to €11.88 after the stainless steel maker said it posted a nine-month net profit of €98 million, compared with a loss of €236 million a year ago.

Areva SA gained 0.38% to €330.00 after the nuclear engineering group reported a 6.1% rise in its third quarter revenue, helped by strong contribution from its reactors and services, and back-end divisions.

Banco Santander, S.A. climbed 0.55% to $12.73 after the financial services provider reported third quarter profit declined 26% to €1.64 billion or €0.1854 per share, from €2.22 billion or €0.2584 per share in the previous year.

BASF SE edged higher 0.50% to €52.48 after the chemicals company reported third quarter sales rose 23% to €15.78 billion from €12.8 billion in the prior year. Net income in the quarter surged 427% to €1.25 billion or 1.35 euros per share, as against last year''s net income of €237 million or 0.26 euros per share.

Bayer AG declined 1.44% to €54.09 after the chemical and pharmaceutical company reported third quarter sales rose 16% to €8.58 billion from €7.39 billion in the previous year. Net income in the quarter increased 12.4% to €280 million or 0.34 euros per share, from €249 million or 0.30 euros per share last year.

Daimler AG gained 0.59% to €47.90 after the German auto maker and industrial group reported third quarter revenues grew 30% to €25.1 billion from €19.31 billion from the prior-year quarter. Net profit in the quarter surged 2775% to €1.61 billion or 1.44 euros per share, compared to net profit of €56 million or 0.04 euros per share in the previous year.

Draka Holding NV fell 0.81% to €15.33 after the Dutch cable maker said the unsolicited takeover offer worth €731 million from rival Nexans SA to consolidate the companies is ""inadequate.""

France Telecom SA soared 3.39% to €17.25 after the telecommunication operator third quarter group revenue decreased 0.5% to €11.63 billion from €11.69 billion last year. The company also confirmed organic cash flow guidance to be €8 billion for fiscal years 2010 and 2011.

Logitech International SA dropped 1.92% to Sfr18.43 after the provider of personal peripherals for computers and other digital platforms reported second quarter sales rose 17% to $582 million, from $498 million in the same quarter last year. Net income in the quarter surged 95% to $41 million or 23 cents per share, compared to net income of $21 million or 11 cents per share in the comparable period prior year.

Renault SA decreased 2.63% to €39.55 after the carmaker said its third quarter sales rose 7.6% from a year earlier, helped by strong international growth and favorable currency movements.

Sanofi-Aventis S.A. dipped 0.46% to $34.38 after the diversified pharmaceutical company said third quarter net income rose 8.9% to €2.47 billion or 1.89 euros per share, from €2.27 billion or 1.74 euros per share a year ago.

SSAB Svenskt Stal AB plunged 6.95% to SEK 97.70 after the Swedish steel manufacturer of hot and cold reduced strip third quarter sales advanced 43% to SEK 9.90 billion from SEK 6.93 billion in the prior-year period. Profit after financial items was SEK 151 million or SEK 0.51 per share, compared to a loss of SEK 1.09 billion or SEK 2.33 per share in the year-ago period.

Technip S.A. fell 2.07% to €59.03 after the France-based operator of gas and oil engineering, technologies and projects said third quarter revenue decreased 11.7% to €1.51 billion from €1.71 billion a year ago. Net income in the quarter dropped 4% to €103.4 million or €0.95 per share from €107.7 million or €1.00 per share in the prior year dragged by higher selling, general and administrative expenses. The company also reaffirmed revenue outlook for 2010.