Alstom, Rio Tinto Boost Europe

Ivaylo
12 Jul, 2007
New York City

Tracking the rally on U.S. markets, European stocks bounced back Thursday with Alstom and Rio Tinto leading the gainers. Alstom announced better-than-expected first-quarter figures, while Rio Tinto boosted miners as it successfully completed the $30 billion purchase of Alcan of the U.S. Nokia also gave the market a boost as Motorola lost market share. National benchmarks advanced in 13 of 17 western European markets that were open.

[R]6:30AM European markets advance with Alstom and Rio Tinto leading stocks higher.[/R]

European markets advanced in mid-day trading on Thursday. All but four national markets were lower, the other 14 gained with the U.K. FTSE 100 gaining 0.2%, Germany DAX adding 0.3% and CAC 40 in France climbing 0.4%.

Alstom SA soared the most since April after the company, which is maker of power plants, announced that sales grew 27%, fueled by increased investment in electricity grids. Miners were also upbeat with BHP Billiton, Xstrata and Rio Tinto leading the gainers. Rio Tinto has successfully completed the $38 billion deal of buying out Alcan of U.S. After Motorola in the U.S. posted a quarterly loss, Nokia advanced on the presumption that the U.S. company has lost market share to Nokia.

In Germany, Abbott Laboratories fell nearly 3% after General Electric called off a deal to buy two preventative health-care businesses valued at $8.13 billon. Also in Frankfurt, Alcoa rose on hopes that it could become a bid target.

In London, Man Group gained after saying second-quarter sales were $3.8 billion as assets under management rose. Cadbury Schweppes declined. The world biggest confectionery company bought a Florida bottler to expand distribution in the southeastern U.S. Royal Dutch Shell slid after UBS downgraded the stock.

In France, Alstom rose after it posted stronger first-quarter figures. Another riser was Schneider Electric, maker of circuit breakers. The company must be compensated after the European Commission wrongly rejected a 2001 merger, a court ruled yesterday.

Advancers of the Day

Alstom rose 5.5% and Nokia rose 2.5%. Miners were also higher with Vedanta Resources rising 3.4% and Xstrata adding up 2.6%. BHP jumped 0.9 % and Anglo American, climbed 0.8%. Man Group increased 1.9%.

Decliners of the Day

Despite providing strong impetus to the market Rio Tinto declined 1.4%. Shell lost 1.3%. Whitbread, owner of the Premier Travel Inn budget hotel chain, dropped 3.4%. Cadbury shares slid 1.1%.

Currencies and gold

The euro traded at $1.3782, up from $1.3761 late Wednesday. The British pound traded at $2.0330, down from $2.0334. The dollar bought 122.14 Japanese yen, up from 122.04. Gold traded in London at $663.00 per troy ounce, up from $660.48 late Wednesday.

[R]5:30AM Gold prices decline Wednesday, wheat and copper advance, oil retreats.[/R]

Gold gave up some of its recent gains after the metal advanced almost $10 an ounce over the past two days. The August gold contract fell $2.30 to settle at $662.10 on the Nymex.

September silver finished flat at $12.975 an ounce.

Copper prices firmed. Strikes at mines in Latin America have deepened worries about world copper supplies, as has the ongoing depletion of copper inventories held by the London Metal Exchange. Nymex copper gained 1.15 cents to settle at $3.6215 a pound.

In New York, energy futures declined after the Energy Information Administration released a worse-than-expected draw on crude oil stockpiles for the week ended July 6, and substantial growth in gasoline inventories. Crude oil for August delivery slipped 25 cents to settle at $72.56 a barrel on the New York Mercantile Exchange. Gasoline futures lost 6.31 cents to $2.3063 a gallon.

September wheat soared 20.25 cents to $6.22 a bushel on the Chicago Board of Trade. December corn dipped 1.5 cents to $3.555 a bushel.