Cautious Advance in European Indexes; TNT Net Plunges 85%

Arthi Gupta
01 Aug, 2011
New York City

European indexes traded higher after the U.S. lawmakers agreed on a spending framework that may worsen unemployment in the next two years. EADS agreed to acquire Vizada for $960 million. The euro-zone unemployment was flat in 9.9%. TNT quarterly earnings slumped 85%.

[R]1:30 PM Frankfurt – European indexes traded higher after the U.S. lawmakers agreed on a spending framework that may worsen unemployment in the next two years. EADS agreed to acquire Vizada for $960 million. The euro-zone unemployment was flat in 9.9%. TNT quarterly earnings slumped 85%.[/R]

European and global indexes edged higher after U.S. President Barack Obama’s announcement that the leaders of the Republican and Democratic parties have agreed on a deal to raise the U.S. debt ceiling just ahead of the August 2 deadline.

The deal will cut about $1 trillion in spending over the next 10 years and allow the government to raise debt in two steps of $2.2 trillion that will be sufficient till 2013.

In Asia, China''s manufacturing sector contracted in July to the lowest level since March 2009, final results from Markit Economics showed today. The HSBC manufacturing purchasing managers'' index fell to 49.3 in July from 50.1 in June.

Euro-zone final Purchasing Managers'' Index fell to 50.4 in July from 52 in June, reaching its weakest reading since the recovery began in October 2009, Markit Economics said.

Separately, the euro area unemployment rate remained unchanged at 9.9% in June, data from Eurostat showed today. The jobless rate was 10.2% a year ago.

In Paris CAC-40 Index gained 28.54 to 0.78% to 3,700.46 and in Frankfurt DAX Index edged higher 52.05 or 0.73% to 7,210.26.

Peabody, ArcelorMittal Revised Offer

Peabody Energy Corp., the U.S. coal miner and steel maker ArcelorMittal on Monday confirmed they intend to launch an all-cash off-market takeover bid to acquire all the shares in Australian coal producer Macarthur Coal Ltd.

Under the offer, Macarthur shareholders will be offered A$15.50 cash per share, plus an A$0.16 per share final dividend payment valuing the equity in Macarthur at approximately A$4.7 billion.

EADS Acquires Vizada

Astrium, an EADS subsidiary agreed to acquire Vizada, an independent provider of global satellite-based mobility communication services from Apax France, a French private equity fund and the majority shareholder, for $ 960 million.

Gainers & Losers

Air Liquide SA rose 2.595% to €98.440 after the French industrial gases group reported first-half group revenue was €7.11 billion, an increase of 9.2% from the previous year. Net profit rose 11.1% compared to a year ago to €750 million.

Dyckerhoff AG fell 2.73% to €36.00 after the Germany-based construction materials manufacturer first-half sales rose 21% to €750 million from €621 million in the same period last year. Net income soared to €19 million from €1 million last year.

MTU Aero Engines Holding AG dipped 0.5% to €51.29 after the German engine manufacturer reported first-half revenues fell 0.2% to €1.347 billion from €1.349 billion in the previous year. Net income in the period rose 21.6% to €89.1 million from last year''s €73.3 million.

TNT Express NV surged 4.26% to €7.35 after the Dutch logistics firm reported second quarter total revenues rose 0.9% to €1.80 billion compared with €1.78 billion in the previous year. Profit for the quarter plunged 85% to €4 million from €26 million in the prior-year period.