Greek PM Survives Confidence Vote; Philips Plunges 13%

Arthi Gupta
22 Jun, 2011
New York City

The European indexes traded sideways after Greek Prime Minister Papandreou won a vote of confidence yesterday. Markets in Europe rebounded and shifted focus to the passage of austerity measures next week. Philips plunged on weak comparable sales outlook for the second quarter of 2011.

[R]1:30 PM Frankfurt – The European indexes traded sideways after Greek Prime Minister Papandreou won a vote of confidence yesterday. Markets in Europe rebounded and shifted focus to the passage of austerity measures next week. Philips plunged on weak comparable sales outlook for the second quarter of 2011.[/R]

U.S. indexes declined ahead of Federal Reserve Chairman Ben Bernanke’s press conference later today. Asian stocks traded higher after the Greek government won a vote of confidence.

Greece''s Prime Minister George Papandreou survived a closely watched confidence vote in parliament yesterday with more than half the members in the 300-strong Parliament voting in his favor. The 155-143 vote in favor of government is the first of three steps necessary to win the last tranche of European Union bailout.

The unions, students and government employees conducted violent protests on the streets as the lawmakers debated late last night. The government is set to seek approval Tuesday to sanction €78 billion of budget cuts.

The EU is firm that the austerity measures have to be passed through if Greece is to receive the €12 billion loan necessary to avoid default.

The International Monetary Fund said in a report that the Spanish economy is facing ""considerable"" risks despite strong and wide-ranging policy response over the last year.

Euro-zone industrial new orders recovered in April, data from Eurostat showed. Industrial new orders grew 0.7% on a monthly basis in April, after falling 1.5% in March.

In Paris CAC-40 Index declined 12.51 or 0.33% to 3,864.68 and in Frankfurt DAX index edged higher 2.56 or 0.04% to 7,288.07.

Nokia and Accenture Finalize Agreement

Nokia and Accenture finalized an agreement for Nokia to outsource Symbian software development and support activities to Accenture.

Under the agreement, Accenture will provide Symbian based software development and support services to Nokia through 2016.

Gainers & Losers

Adidas AG gained 1.13% to €53.00 after the producer of sportswear and sports equipment announced plans to open its biggest distribution center in Niedersachsenpark, Germany, in the first-half of 2013.

Carrefour SA fell 1.63% to €26.86 after the retailer’s credit rating outlook was cut to ""negative"" from ""stable"" by a rating agency.

H & M Hennes & Mauritz AB declined 2.5% to SEK 209.40 after the Swedish retail-clothing company said second quarter sales rose 2.5% to SEK 32.4 billion from SEK 31.6 billion. Group profit after tax fell 18% to SEK 4.26 billion or SEK 2.57 per share from SEK 5.21 billion or SEK 3.15 per share in the year-ago quarter.

Koninklijke Philips Electronics N.V. plunged 13.26% to €15.60 after the Dutch consumer electronics maker said it expects Lighting segment to report low single-digit comparable sales growth in the second quarter of 2011, reflecting weaker-than-expected market conditions, particularly in the consumer sector in Western Europe and construction activity in mature markets.

Merck KgaA edged lower 2.22% to €73.44 after the drugmaker decided to no longer pursue the global approval process of Cladribine Tablets for the treatment of relapsing-remitting multiple sclerosis.

Nokia Corporation soared 3.6% to $6.06 after the Finland-based handset maker announced that Michael Halbherr was appointed as executive vice president to spearhead Nokia''s revised mission in mobile and location-based services.

Suedzucker AG surged 5.7% to €24.05 after the German sugar company reported first quarter revenues increased 7% to €1.64 billion from €1.53 billion a year ago. For the first quarter, group operating profit rose 23.5% to €184 million compared to €149 million in the prior year.