European Indexes Advance; Nokia, Novartis Profit Decline

Arthi Gupta
27 Jan, 2011
New York City

The European indexes climbed after euro-zone economic sentiment index fell and German inflation rose in January. French unemployment rose in December and consumer confidence dipped in January. Spanish retail sales declined in December. Nokia net falls.

[R]4:00 PM Frankfurt – The European indexes climbed after euro-zone economic sentiment index fell and German inflation rose in January. French unemployment rose in December and consumer confidence dipped in January. Spanish retail sales declined in December. Nokia net falls.[/R]

U.S. indexes fell after weekly jobless claims surged and Asian markets traded mixed after Standard & Poor''s downgraded Japan''s sovereign credit rating.

The U.S. Federal Reserve maintained its $600 billion asset purchase plan and held its key interest rate in a historically low range of zero to 0.25%.

The European Central Bank''s credibility on price stability remains intact and it will do what is necessary to keep inflation under control, the bank''s president Jean-Claude Trichet said on Wednesday.

In an interview with Bloomberg Television at the World Economic Forum in Davos, Trichet said, ""It is not by chance that we have delivered price stability. Our credibility is based on that doctrine.""

Inflationary pressures originating from global commodities markets as well as goods imported from emerging markets can no longer be ignored, Executive Board member of the European Central Bank Lorenzo Bini Smaghi said in Bologna, Italy on Thursday.

Another ECB policy maker, Juergen Stark said in a speech in Kiel, Germany on Wednesday that euro area inflation is likely to remain around or slightly above 2% due to increases in commodity prices. He said that the ECB is prepared to inflationary threats.

Euro-zone banks have further tightened credit standards for home loans in the final quarter of 2010, but banks are likely to ease the grip in the first quarter of this year, the European Central Bank said in its latest quarterly Bank Lending Survey.

In Paris CAC 40 Index gained 9.22 or 0.23% to close at 4,058.29 and in Frankfurt DAX Index edged higher 24.21 or 0.34% to close at 7,151.56.

Euro-zone Leading Index Improves, Economic Sentiment Falls

The Conference Board Leading Economic Index for the euro-zone rose 0.8% in December compared to a 0.6% increase in November.

Euro-zone economic sentiment indicator fell to 106.5 in January from 106.6 in December, the European Commission said today

The European Commission said the business climate index increased to 1.58 in January from a revised 1.38 in December.

German Credit Constraint Indicator Drops, Inflation Rises

The credit hurdle for German industry and trade continued to ease in January. The Ifo Institute noted that its credit constraint indicator dropped 0.9 percentage point to 25.4% in January, the thirteenth consecutive monthly fall.

German consumer prices rose 1.9% annually in January following the 1.7% increase in December, flash estimate from the Federal Statistics Office showed.

On a monthly basis, consumer prices declined 0.5% in January reversing from December''s increase of 1%.

French Unemployment Rises, Consumer Confidence Dips

French unemployment increased 1% or 27,100 in December from November, data from the labor ministry showed on Wednesday. The increase in November was 0.8%.

French consumer confidence indicator fell to 85 in January from 86 in December, statistics office Insee said on Thursday, citing results of its latest households'' confidence survey.

Households viewed their major purchases intentions less favorable in January than in December.

Spanish Retail Sales Decrease

Spanish retail sales fell 4.4% annually in December, following a 1.1% drop in November, the statistics office INE said.

Within total retail sales, food sales dropped 2.2% on a yearly basis and non-food product sales decreased 4.8% in December.

Swedish Economic Sentiment Improves, Jobless Rate Rises, PPI Up

Survey results from the National Institute of Economic Research showed that the Swedish economic sentiment index rose to 113.6 in January from an upwardly revised 111.3 in the December.

Sweden''s jobless rate climbed to 7.4% in December from 7.1% recorded in November, latest data from the Statistics Sweden showed today.

There were 364,000 persons unemployed in December, a decrease of 53,000 compared to December 2009. The statistics office said the decrease mainly occurred among men.

Swedish producer prices rose 4.3% in December from a year earlier, Statistics Sweden said on Thursday. On the domestic market, producer prices increased 5.8% and on the export market 2.5%.

Gainers & Losers

CNH Global N.V. gained 2.01% to $51.20 after the agricultural and construction equipment maker said fourth quarter profit grew more than six-fold owing to a one-time tax benefit. Quarterly revenues grew 17.1% to $3.76 billion from $3.21 billion in 2009 on 32% increase in net sales of construction equipment. Net income in the quarter surged 646% to $209 million or $0.87 a share, from $28 million or $0.12 per share due to a tax benefit of $136 million.

Logitech International S.A. climbed 0.66% to Sfr18.35 after the Swiss computer interface devices manufacturer reported a 14% annual increase in profit for the third quarter, boosted by 22% sales growth and margin expansion.

Nokia Corp. advanced 1.32% to $10.73 after the mobile handset maker reported fourth quarter net sales increased 6% to €12.65 billion from €11.99 billion in the same quarter last year. Profit in the quarter declined 21% to €745 million or 0.20 euros per share from €948 million or 0.26 euros per share in the prior year.

Novartis AG climbed 0.24% to $57.94 after the Swiss pharmaceutical giant reported a drop in profit for the fourth quarter, as it incurred hefty one-time costs and as last year''s strong H1N1 vaccine sales did not repeat.

Net sales grew 10% to $14.20 billion from $12.93 billion. Net income in the quarter slipped 6.1% to $2.17 billion or 94 cents per share from $2.31 billion or 1.01 per share in the prior year.

Swedish Orphan Biovitrum AB edged higher 0.27% to SEK 37.50 after the Sweden-based pharmaceutical company announced a Removab distribution agreement with Fresenius Biotech.

Under the agreement Sobi will distribute Removab exclusively in 15 European countries over a period of 7 years.