European Indexes Higher, UBS Net Plunges 54%

Arthi Gupta
02 May, 2012
New York City

The European market indexes advanced despite the rise in unemployment across the region and manufacturing activity shrank. UBS quarterly net plunged 54% but TNT swung to profit.

[R]1:00 PM Frankfurt – The European market indexes advanced despite the rise in unemployment across the region and manufacturing activity shrank. UBS quarterly net plunged 54% but TNT swung to profit.[/R]

The European indexes gained modestly despite the latest unemployment rate increase across the region. In addition, manufacturing activities in Spain and Italy contracted.

On the earnings front, UBS quarterly net plunged 54% on the account of the hefty charge tied to its own credit loss and Vestas loss widened 91% in the quarter.

In Paris trading, the CAC-40 Index gained 24.37 or 0.8% to 3,237.13 and in Frankfurt the DAX Index edged higher 18.79 or 0.3% to 6,779.95.

The yield on Spain’s benchmark 10 year bonds rose five basis points to 5.80%, and the Italian bond yields was at 5.52%.

Euro-zone Jobless Rate Climbs

The seasonally adjusted jobless rate in the euro area rose to 10.9% in March from 10.8% in February, the latest data from Eurostat showed today. In March 2011, the rate was 9.4%.

Separately, the euro-zone manufacturing sector fell to a near three-year low of 45.9 in April, from 47.7 in March and below the earlier flash estimate of 46.0.

Italian Manufacturing Activity Declines

The Markit/ADACI Purchasing Managers'' Index for the Italian manufacturing sector dropped to 43.8 in April from 47.9 in March. The manufacturing activity declined for the ninth month in a row in April.

Spanish Manufacturing Sector Contracts

The Spanish manufacturing sector fell for the third straight month in April, Markit Economics reported today.

The seasonally adjusted Purchasing Managers'' Index dropped to 43.5 in April, from 44.5 in March.

Italian Unemployment Rate Rises

Italy''s seasonally adjusted jobless rate rose to 9.8% in March from 9.6% in February, upwardly revised from the 9.3% reported earlier, data released by the statistics office ISTAT showed.

Gainers & Losers

Fuchs Petrolub AG fell 0.8% to €42.15 after the independent manufacturer of lubricants stated first quarter sales revenues improved 11% on an annual basis to €448.4 million from €403.8 million. Net profit in the period climbed 9.3% to €51.5 million or 72 cents per share compared to net profit of €47.1 million or 65 cents per share in the prior year.

TNT Express N.V. climbed 0.1% to €9.17 after the express delivery company said first quarter total revenues grew 1.3% to €1.82 billion from €1.80 billion in the 2011 first quarter. Net profit in the quarter swung to €16 million compared to a net loss of €106 million a year earlier.

UBS AG soared 5.6% to 11.96 francs after the financial services firm reported first quarter net profit plunged 54% to 827 million francs or 22 cents per share from 1.81 billion francs or 47 cents per share last year.

Net interest income fell 11% to 1.59 billion francs while net fee and commission income dropped 9% to 3.84 billion francs.

Vestas Wind Systems A/S plunged 10.1% to DKK 45.85 after the Danish wind turbine maker reported first quarter revenue rose 4.2% to €1.105 billion from €1.06 billion in the year-earlier period. Loss for the quarter widened 91% to €162 million or 80 cents per share from €85 million or 42 cents per share in the previous year.