Market Updates
European Markets Gain; LVMH, BMW Rise
123jump.com Staff
06 Feb, 2009
New York City
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Stocks in Europe recover tracking gains in New York. US unemployment surges on a record job losses. BMW gains but Volkswagen tumbles. In Paris trading, LVMH surges 13% on better than expected earnings.
[R]1:00PM New York, 6:00 Frankfurt – Stocks in Europe recover tracking gains in New York. US unemployment surges on a record job losses. BMW gains but Volkswagen tumbles. In Paris trading, LVMH surges 13% on better than expected earnings.[/R]
European stocks closed higher with gains in London, Frankfurt and Paris. Markets opened higher but gains were trimmed in the session on the release of larger than expected job losses in the U.S. European markets closed higher tracking gains in New York on the hopes that the recent employment weakness will spur lawmakers to pass a larger stimulus package.
Volkswagen, German automaker and Europe’s biggest, declined after recording a drop in January car sales as demand for cars faltered under weak credit conditions.
Month-on-month industrial production in UK and Germany declined in December and the Germany Economic Ministry warned that industrial output in Europe’s largest economy would remain subdued in the near term due to lower than expected demand.
France’s trade deficit also reached a record high.
Stock Movers
Infineon Technologies rose 14% after the German chip maker announced plans to cut investments in property and plants and equipment between 50 million euros to 200 million euros to preserve capital. The company said the recession will hurt most of its business units.
Index Movers
In Frankfurt the DAX Index gained 1.4% or 62.14 to 4,572.63. Of the index shares, 21 gained and 9 declined.
Infeneon Tech rose for the second day and lifted the DAX Index with a increase of 12.7% followed by gains in BMW of 10.7%, in Salzgitter of 7.8%, in Daimler of 7.2% and BASF of 6.5%.
Volkswagen, Europe’s largest carmaker, was among the top decliners with a loss of 2.1%. The automaker’s sales in January fell as global demand for cars continues to fall.
In Paris the CAC 40 Index climbed 2.3% to 3,135.91. LVMH surged 12.7% on strong earnings. The world’s biggest luxury goods group reported that operating profit increased 4% in 2008.
LVMH led the gainers in the CAC 40 with arise of 12.7% followed by PRP with a rise of 9.5% followed by gains in Peugeot of 8.7%, in Renault of 8% and BNP Paribas of 7.1%.
GDF Suez led decliners in the CAC 40 index with a loss of 5% followed by losses in Sanofi-Aventis of 2.4%, in Essilor International of 1.5%, in EDF of 0.3% and in Alcatel-Lucent of 0.07%.
Volkswagen, BMW car sales fall
Bloomberg today reported that car sales for Germany’s leading car makers, Volkswagen and BMW fell in January as global demand for cars fell steeply. Volkswagen car sales fall 20% compared to 2.9% decline in December.
BMW sales plunged 24% in January. However, BMW issued positive outlook on earnings for 2008 after last year’s job cuts and concentration on two brands, Mini and Rolls-Royce. BMW also announced that it was cutting production in anticipation of weaker sales.
US unemployment rises
U.S. Labor Department reported that in January employers cut 598,000 jobs in January and the unemployment rate surged to 7.6%. In the largest monthly job cut since 1974 as the economic slowdown spreads to more industries. Job losses are likely to accelerate as more companies cut cost and face slowing demand.
Most jobs were lost in the manufacturing sector followed by similar losses in the construction, retail and the services industries.
Annual Returns
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Earnings
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