European Indexes Surge; German Factory Orders Rise

Arthi Gupta
07 Dec, 2010
New York City

The European indexes soared after President Obama announced extension of tax cuts and German factory orders surged in October. Swiss jobless rate rose in November. Czech retail sales declined in October. Iceland economy expanded in the third quarter.

[R]4:00 PM Frankfurt – The European indexes soared after President Obama announced extension of tax cuts and German factory orders surged in October. Swiss jobless rate rose in November. Czech retail sales declined in October. Iceland economy expanded in the third quarter.[/R]

U.S. and European markets advanced after Obama agreed to a two-year extension of all of the tax cuts and Asian markets traded mixed.

In Paris CAC 40 Index surged 84.77 or 2.26% to close at 3,834.00 and in Frankfurt DAX Index edged higher 86.32 or 1.24% to close at 7040.70.

Eurogroup Rejects Hiking Rescue Fund

Euro-zone finance ministers decided not to increase the size of the current €750 billion rescue fund on Monday. They also ruled out immediate measures to assist Portugal and Spain noting that the existing facilities are sufficient in an emergency.

The Council of Economic and Finance Ministers is set to meet in Brussels today to formally approve the Irish package. Ireland was the second nation in the 16-nation euro bloc to avail external assistance after Greece.

Obama Extends Tax Cuts

President Obama announced a ""framework"" for extension of tax cut and said the tentative bi-partisan agreement will extend all of the tax cuts for two years. The agreement would also extend unemployment benefits for the long-term jobless for 13 months, and reduce payroll taxes for all workers for a full year.

Obama said he agreed to a two-year extension of all of the Bush-era cuts in exchange for the jobless insurance extension as a means of breaking the stalemate on the issue.

German Factory Orders Rise

German factory orders grew 1.6% on a monthly basis in October, following a 4% fall in September, the Federal Ministry of Economics and Technology said.

Domestic orders grew 2.4% in October, reversing September''s 0.8% fall and foreign demand increased 0.8% in October.

Annually, factory orders rose 17.9% in October after rising 14.1% in September.

Portuguese Industrial New Orders Up

Portuguese industrial new orders increased in the August to October period, according to a report by the Statistics Portugal released today.

Industrial new orders grew 12.5% annually in the August to October period, compared to a 9.9% growth in the three months ended in September. A year earlier, new orders were down 21.9%.

Industrial new orders in the domestic market rose 7.2% annually in the August to October period, compared to a 0.9% fall in the previous three months period. At the same time, new orders in the external market rose 17.9%, after a 21.6% in the July to September period.

Swiss Jobless Rate Rises

Switzerland''s jobless rate rose to 3.6% in November, from 3.5% in October, the State Secretariat for Economic Affairs said. The number of registered unemployed totaled 141,668 in November, representing an increase of 2,303 from October.

Czech Trade Balance Up; Industrial Production, Retail Sales Fall

Czech trade balance showed a surplus of CZK15.3 billion in October, the Czech statistics office said. Compared to the same month last year, the surplus fell by CZK1.1 billion.

The annual decline in trade balance was mostly influenced by increase in shortfall in mineral fuel trade as well as trade in chemicals and related products, the statistics office said.

Exports increased 17.2% annually at current prices while imports surged 19.4% in October. On a monthly basis, exports grew 3.1% after adjusting to seasonal variations and imports declined 0.1%.

Czech industrial production rose 6.9% in October compared to the 12.4% increase in September, the Czech Statistics Office said.

The industrial orders fell on lower output of food products, wood and wood products and beverages.

Czech''s retail sales, including retail sales and repair of motor vehicles decreased a seasonally adjusted 0.3% on a monthly basis in October, the Czech Statistics Office said. Annually, retail sales fell 0.7% in October.

The decline was driven by fall in non-specialized stores and fuel sales, while higher slump prevent positive developments in the automotive segment, the statistics office said.

Iceland Economy Expands in Q3

Icelandic economy expanded in the third quarter supported by the strong rebound in household consumption, data from Statistics Iceland showed.

The seasonally adjusted gross domestic product grew 1.2% sequentially in the third quarter, reversing the 0.3% decline in the second quarter. The growth ended seven consecutive quarters of contractions since the third quarter of 2008.

Austria Inflation Rises; Trade Deficit Narrows

Austria''s annual wholesale price inflation rose 7.7% in November, as against a 7% growth in October, according to a report by the Statistics Austria.

On a monthly basis, wholesale prices rose 0.8% in November, compared to a 0.2% fall in October.

Austria''s trade deficit narrowed to €2.75 billion in the January to September period, from the €3.01 billion deficit recorded a year ago, a report by the Statistics Austria showed on Tuesday.

Gainers & Losers

Alfa Laval AB surged 3.52% to SEK 135.20 after the Sweden-based provider of specialty products and engineering solutions said that it acquired Olmi S.p.A., the Italian company specialized in the designing and manufacturing of shell and tube heat exchangers and air coolers for applications in the petrochemical, power and oil and gas industries.

The transaction was completed based on an enterprise value of about SEK 500 million.

Alstom S.A soared 4.94% to €34.22 after the power generation firm signed a contract with the Chinese government.

Air Berlin plc gained 1.58% to €3.86 after the German airline reported an 8.4% annual increase in number of passengers for November. Total number of passengers traveled with Air Berlin in the month was about 2.51 million, an increase of 8.4% over 2.31 million passengers in last year''s November.

Fiat SpA rose 3.02% to €13.98 after the Italian automobile manufacturer said it will initiate legal action against the producers of the television show AnnoZero for statements made on air on December 2, that were “highly harmful and damaging” to the image and reputation of the company.

4SC AG climbed 0.09% to €3.45 after the drug discovery and development company said the U.S. Patent and Trademark Office granted patent 7842820 for its lead oncology compound resminostat or 4SC-201.

ING Groep N.V. fell 2.19% to $9.81 after the Dutch financial services company said it will no longer rebalance its hedge portfolio, which was used to hedge employee options and facilitate employee share programs.