Euro Area PPI Soars; Adidas Profit Plunges 63%, Daimler Falls

Arthi Gupta
02 Mar, 2011
New York City

The European indexes fell after U.S. crude touched the $100 a barrel mark. Euro area producer price index rose 1.5% in January, Spanish jobless claims soared in February and Swedish current account surplus rose in the fourth quarter. Polish central bank retained key rate at 3.75%.

[R]3:30 PM Frankfurt – The European indexes fell after U.S. crude touched the $100 a barrel mark. Euro area producer price index rose 1.5% in January, Spanish jobless claims soared in February and Swedish current account surplus rose in the fourth quarter. Polish central bank retained key rate at 3.75%.[/R]

European markets weakened again as uncertainty in the Middle East lifted oil prices and markets in Asia declined.

Standard & Poor''s said it could lower ratings on Portugal and Greece in the next two months after analyzing the European Stability Mechanism. The rating agency noted that the country''s high external financing need and limited funding sources will force Portugal to approach an international bailout.

In Paris CAC 40 Index declined 37.24 or 0.92% to close at 4,029.91 and in Frankfurt DAX Index edged lower 60.17 or 0.83% to close at 7,163.13.

Euro-zone PPI Rises

Euro-zone producer price index rose 1.5% on a monthly basis in January, following the 0.8% rise in December, Eurostat said.

On an annual basis, the PPI climbed 6.1% in January compared to the 5.3% rise in December.

The spike in producer price inflation was largely due to higher energy prices, which rose 12.5% annually.

Spanish Jobless Claims Soar

The number of people applying for jobless benefits in Spain rose sharply last month led by rising unemployment in the service sector, the government said on Wednesday.

The number of unemployed increased 68,300 from January, bringing the jobless total in Spain to 4.3 million, the employment ministry said.

Compared to February 2010, jobless claims rose by 168,600. Services shed the most jobs in February, with the number of jobless claims in the sector rising by 39,600 from the previous month.

Spain''s unemployment rate surged to 13-year high to 20% in 2010. Spain''s unemployment rate surged to 20.4%, the highest in the euro-zone where the rate hovers near 10%.

The number of claimants aged below 25 rose 5% by 22,555 from January compared with a 1.2% increase in those aged above 25. Spain has unemployment levels of more than 40% among the youth.

Swedish Current Account Surplus Up

Swedish current account surplus rose to SEK 53.3 billion in the fourth quarter from a revised SEK 48 billion in the third quarter, Statistics Sweden said on Wednesday. That was also up from SEK 39.9 billion surplus recorded in the fourth quarter of 2009.

Swiss Construction Output Rises

Swiss construction output rose 2.4% between October and December compared to the same period a year earlier, the Federal Statistics Office said on Wednesday.

Building construction increased 3.1% last quarter, while civil engineering and specialized construction rose 4.4% and 2.5% respectively.

Norway Retail Sales Decrease

Norway''s seasonally adjusted retail sales volume decreased 0.1% on a monthly basis in January, Statistics Norway said on Wednesday. In terms of value, retail sales fell 0.6% in January compared to the previous year.

Estonia Retail Sales Drop

Estonian retail sales declined 2% at constant prices annually in January, Statistics Estonia said on Wednesday. The transition to euro was cited as one of the reasons behind the decline.

Polish Central Bank Retains Key Rate

Poland''s central bank decided to keep its benchmark reference rate unchanged at 3.75% at the end of its two-day monetary policy meeting on Wednesday.

The lombard rate was kept steady at 5.25%, while the deposit and rediscount rates were maintained at 2.25% and 4% respectively.

Gainers & Losers

adidas AG gained 1.01% to €46.99 after the German sports goods maker reported fourth-quarter net sales increased 19.2% to €2.93 billion from €2.46 billion in the prior year. Net income in the quarter slumped 63% to €7 million or 0.03 euros per share from last year''s €19 million or 0.09 euros per share, as higher expenses offset revenue growth across all regions.

Daimler AG fell 2.66% to €49.67 after the German automaker said its U.S. vehicle sales for February 2011 increased 5.3% to 16,660 units from 15,827 units a year earlier.

Bouygues SA surged 3.51% to €34.37 after the French conglomerate said fiscal year 2010 sales edged higher 0.4% to €31.23 billion compared to €31.35 billion last year. Net profit for the full year declined 19% to €1.07 billion from €1.32 billion last year, due mainly to a charge related to its stake in Alstom SA, as well as weak performance at Colas business segment.

Essilor International SA slumped 3.13% to €51.00 after the producer of ophthalmic lenses said fiscal year 2010 revenue grew 19.1% to €3.89 billion from restated €3.27 billion in the comparable period a year earlier. Profit for the year increased 18.2% to €461.97 million from €390.68 million, as restated, last year. Earnings per share improved to 2.18 euros from 1.88 euros in the previous year.

Holcim Ltd. dropped 1.46% to Sfr67.30 after the cement maker stated fiscal year 2010 net sales grew 2.5% to Sfr21.65 billion from Sfr21.13 billion a year ago. On a like-for-like basis, net sales declined 2.1% from last year. For the full year, net income declined 19.7% to Sfr1.18 billion from Sfr1.47 billion in the previous year. On a per share basis, earnings were 3.69 Swiss francs, lower than 4.93 Swiss francs in the prior year.

Ipsen SA declined 2.50% to €24.15 after the French pharmaceutical company said fiscal year 2010 revenues rose 5.4% to €1.17 billion compared to €1.11 billion a year earlier. Profit for fiscal year 2010 declined 39% to €95.3 million or 1.13 euros per share compared to €156.6 million or 1.86 euros per share a year ago.

Nokia Corp. dipped 0.12% to $8.62 after the mobile phone supplier said it plans to establish a new manufacturing site near Hanoi in northern Vietnam. Accordingly, it plans an initial investment of about €200 million, with further sizeable investments thereafter.

The site would further expand Nokia''s manufacturing network, which currently consists of ten major facilities in nine countries.

Swiss Life Holdings AG plunged 5.32% to Sfr144.20 after the life insurance provider reported fiscal year 2010 net profit surged 100% to Sfr557 million or 17.37 Swiss francs per share from Sfr278 million or 8.83 Swiss francs a share, a year ago