Outlook for Europe Lifted; Vivendi Swings to Profit, Nestle Bids for Yoplait

Arthi Gupta
01 Mar, 2011
New York City

The European indexes edged higher after euro-zone and German manufacturing expanded in February and German jobless rate fell. Swedish GDP rose more than estimated and Hungarian producer price index eased in January. Nestle and two France based companies are in the race to acquire Yoplait stake.

[R]3:00 PM Frankfurt – The European indexes edged higher after euro-zone and German manufacturing expanded in February and German jobless rate fell. Swedish GDP rose more than estimated and Hungarian producer price index eased in January. Nestle and two France based companies are in the race to acquire Yoplait stake.[/R]

U.S. and Asian indexes advanced.

In Paris CAC 40 Index gained 8.63 or 0.21% to close at 4,118.98 and in Frankfurt DAX Index edged higher 33.47 or 0.46% to close at 7,305.79.

Euro-zone Manufacturing Climbs, Jobless Rate Falls, Inflation Rises

Euro-zone manufacturing sector continued to expand in February with the manufacturing purchasing managers'' index rising to 59 from 57.3 in January; a final report from Markit Economics showed on Tuesday.

Euro-zone''s seasonally adjusted unemployment rate slipped to 9.9% in January from 10% in December, Eurostat said. The number of unemployed decreased 72,000 from December to 15,775 million in the euro area.

The jobless rate for the EU27 was 9.5% in January compared to 9.6% in December. The number of unemployed in the European Union member states declined by 43,000 on a monthly basis and by 99,000 from a year ago level.

Euro-zone inflation edged higher to 2.4% in February from 2.3% in January, according to a flash estimate from the European Union statistics agency Eurostat. Inflation breached the European Central Bank''s target of ''below but close to 2%'' for the third straight month.

EC Raises Growth and Inflation Outlook

The European Commission revised up its 2011 growth and inflation for the euro area and EU27, citing better prospects for the global economy and strong EU business sentiment.

In its interim forecast, the Commission said the economy of 17 nations is set to expand by 1.6% this year slightly faster than the 1.5% growth predicted in November. The full-year growth forecast for EU27 is revised up to 1.8% from 1.7%.

The Commission further lifted euro-zone inflation outlook to 2.2% from 1.8% due to higher energy and commodity prices. It also revised up the inflation forecast for EU27 to 2.5% from 2.1%.

German Jobless Rate Drops, Manufacturing Sector Growth Accelerates

German unemployment dropped more than expected in February. The seasonally adjusted number of unemployed fell by 52,000 in February after falling by a revised 18,000 in January, according to data released by the Federal Labor Agency.

German manufacturing sector improved at the sharpest rate in survey history in February, final data from Markit Economics showed on Tuesday.

The seasonally adjusted Markit/BME manufacturing purchasing managers'' index advanced to a record- high of 62.7 in February from 60.5 in January.

French Manufacturing Sector Rises

French manufacturing sector expanded at a faster pace in February, helped by robust production and new order growth, final data from Markit Economics showed.

The seasonally adjusted purchasing managers'' index rose to 55.7 in February from 54.9 in January.

Swiss GDP Expands, Manufacturing Activity Improves

Swiss gross domestic product rose 0.9% in the fourth quarter compared to the 0.8% growth in the third quarter, the State Secretariat for Economic Affairs said on Tuesday.

Annually, the economy expanded 3.1% in the fourth quarter after growing 2.6% in the previous three months.

Switzerland''s manufacturing growth improved in February with the seasonally adjusted SVME Purchasing Managers'' Index rising to 63.5 during the month from 60.5 in January, survey results from the SVME Association of Purchasing and Materials Management and Credit Suisse showed today.

Swedish Manufacturing Activity Declines, GDP Up

Sweden''s manufacturing sector growth eased unexpectedly in February, a survey by Swedbank and Swedish National Association of Purchasing and Logistics showed today.

The Purchasing Managers'' Index fell to 60.9 in February from 61.5 in January.

Swedish gross domestic product grew a working-day adjusted 7.3% annually in the fourth quarter following a 6.9% rise in the third quarter, Statistics Sweden said.

Hungary Producer Price Index Ease

Hungary''s producer price index rose 7% annually in January as against December''s 8.1% increase, the Central Statistics Office said.

On a monthly basis, producer prices were flat for the second straight month.

Domestic producer prices increased 0.6% on a monthly basis and 9.6% annually in January. Export prices of industry fell 0.4% on a monthly basis and climbed 5.2% over a year earlier in January.

Portuguese Industrial Output Declines

Portugal''s industrial production declined in January, led by a significant fall in energy output, data released by Statistics Portugal showed on Tuesday.

Industrial output dropped 1.7% annually in January after increasing 3.6% in December. Energy production plunged 12.8% during the month after rising 9.5% last month.

Gainers & Losers

Aixtron AG surged 5.10% to €31.40 after the provider of deposition equipment to the semiconductor industry reported fourth quarter revenues surged 91% to €224.7 million from €117.9 million in the prior year. Net profit in the quarter soared 152% to €61.6 million or 0.60 euros per share compared to net profit of €24.4 million or 0.26 euros per share last year.

Luxottica Group S.p.A. gained 1.04% to $31.10 after the luxury eyewear maker reported fourth quarter net sales rose 7% percent to $1.83 billion from $1.71 billion last year. Net income in the quarter surged 73% to $74.86 million or $0.16 per share from $43.23 million or $0.09 per share in the previous year.

Nielsen Holdings N.V. rose 2.31% to $26.59 after the information and measurement company reported fourth quarter revenues rose 5.7% to $1.37 billion compared to $1.30 billion last year. Net income in the quarter slumped 93% to $3 million or 1 cent per share compared to prior year''s $44 million or 16 cents per share.

Nestle SA rose 0.29% to Sfr52.75 after the world''s largest food company and packaged food supplier and General Mills Inc. are among leading bidders to acquire a 50% stake in French yogurt maker Yoplait.

Both companies have submitted offers worth about €1.6 billion or $2.2 billion but China based Bright Foods has offered $2.3 billion for the stake according to French newspaper Le Figaro. Sources close to board of the company tell 123jump.com that nine bids were received by the board and two France based organizations are favored by the board.

STRATEC Biomedical Systems AG climbed 1.55% to €32.50 after the company engaged in the development and manufacture of fully automated systems proposed a dividend of €0.50 per share for the 2010 financial year, an increase of 11% compared with the dividend of €0.45 paid for the previous year.

Syngenta AG edged higher 0.06% to Sfr311.60 after the Swiss agribusiness company signed an agreement to divest its materials protection business to Lanxess for an undisclosed amount.

Technicolor SA plunged 5.09% to €5.20 after the French color film process company reported fiscal year 2010 turnover declined 1.2% to €3.57 billion from €3.62 billion in the prior year. Fiscal year 2010 net loss narrowed 80% to €69 million or 0.5 euros per share compared to net loss of €342 million or 13 euros per share last year.

Vivendi SA rose 0.10% to €20.68 after the French international media conglomerate stated fourth quarter revenues, on an IFRS basis, increased 5.3% to €8.01 billion from €7.61 billion in the comparable period. Net earnings in the quarter were €559 million or 0.45 euros per share compared with a loss of €958 million or 0.78 euros per share last year.