Earnings Buoy Europe

Ivaylo
26 Apr, 2007
New York City

European markets advanced for a second straight day after earnings reports in the engineering, drug and metals industries topped estimates. ABB rallied to the highest in six years after profit more than doubled and Bayer gained after earnings increased almost fivefold. French and German markets traded back at highs, with the German DAX Xetra 30 index rising over the 7,400 level, up 0.8%, and the French CAC-40 index up 0.4%, while the U.K. FTSE 100 index rose 0.6%.

[R]6:30AM European markets rise Thursday on strong earnings reports[/R]
European markets were higher on Thursday. The German DAX Xetra 30 index rose over the 7,400 level, up 0.8% at 7,401.89, and the French CAC-40 index was up 0.4% at 5,971.88, while the U.K. FTSE 100 index gained 0.6% at 6,498.10. National benchmarks rose in all of the 17 western European markets that were open.

Advancers

ABB led the advancers, up 5.8% in Switzerland after the Swiss-Swedish engineering firm, announced its first-quarter profit more than doubled to a stronger-than-forecast $537 million from $204 million, with revenue up 21% to $6.21 billion and orders up 26% to $8.64 billion.

German pharmaceutical company Bayer rose 3.7% after the company reported an above-forecast increase in first-quarter net profit to 2.8 billion euros, from 600 million euros a year ago.

France Telecom gained 2.9% after it reported that its first-quarter sales rose 1.8% to 12.8 billion euros. France Telecom said its gross operating margin increased to 36.3% from 36.2% on cost controls and confirmed its objectives for 2007.

German chemicals company BASF added 1.8% after its first-quarter profit climbed a better-than-forecast 9% to 1.04 billion euros, with sales up 16% to 14.63 billion euros.

German industrial company Siemens rose 1% after early losses. The company unveiled new financial targets, targeting a return on capital employed between 14% and 16% by 2010, up from the 10% achieved in fiscal 2006.

Decliners

Ericsson declined 0.4% after it announced that its first-quarter net income rose 27%, just below analyst forecasts. UBS downgraded the stock to neutral.

Electrolux sank 5.9%. The second-largest household appliances maker in the world said North American sales declined and raw-materials costs will erode full-year profit.

Oil and precious metals

Gold and silver were little changed after recovering from earlier losses on speculation the dollar may fall to a record low against the euro. Gold for immediate delivery fell $2.20, or 0.3%, to $684.05 an ounce. Silver for immediate delivery fell 3 cents, or 0.3%, to $13.77 an ounce.

Crude oil fell after Iran said it was making progress in talks with the European Union on Iranian nuclear research, while some analysts predicted supplies of crude could meet demand for gasoline during the coming summer. Crude oil for June delivery fell 33 cents, or 0.5%, to $65.51 a barrel in after-hours electronic trading on the New York Mercantile Exchange and stood at $65.61 in morning trading in London. Brent crude for June settlement fell 33 cents, or 0.5%, to $68.24 on the ICE Futures exchange.

Currencies

The dollar rose against other major currencies in morning European trading Thurssday. The euro traded at $1.3614, down from $1.3636 late Wednesday in New York. The British pound traded at $2.0002, down from $2.0012. The dollar fetched 119.11 Japanese yen, up from 118.71.

[R]5:00AM Copper rallied on Wednesday, while gold and silver were steady.[/R]
The most-active July copper contract advanced 4.15 cents to end at $3.6055 per pound on the New York Mercantile Exchange. June gold finished down 30 cents at $687.40 a troy ounce, while July silver closed down 1.9 cents at $13.897. July platinum settled up $5.70 at $1,317.20 an ounce and June palladium gained $4.05 to end at $383.05.

Crude oil futures advanced above $65.00 while gasoline futures surged to an eight-and-a-half month high after the Department of Energy reported a large drop in gasoline stockpiles. The June crude oil contract ended up $1.26 at $65.84 a barrel. May gasoline finished also up 7.37 cents at $2.2826 a gallon. May heating oil settled up 5.55 cents at $1.9015 a gallon. April natural gas rose 9.1 cents to close at $7.689 per million British thermal units.

On the New York Board of Trade, the May Arabica coffee contract declined 0.05 cent at $1.0435 a pound, with July off 0.40 cent at $1.0725. On the Chicago Board of Trade, May corn ended 10.75 cents higher to $3.7125 per bushel, July advanced 10.50 cents to $3.8175, and December settled 7 cents higher at $3.7950.