European stocks fluctuated after the Stoxx Europe 600 Index rallied by the most in more than three months as conflicting U.S. reports gave mixed signals on the strength of the world’s largest economy Pernod Ricard SA slid 2.6 percent after reporting full-year profit that missed analysts’ estimates. Yara International ASA, the largest publicly traded maker of nitrogen fertilizer, dropped 2.5 percent after Morgan Stanley downgraded the shares.
Nordic forestry companies Stora Enso Oyj, Holmen AB and Norske Skogindustrier ASA jumped more than 4 percent after a Finnish newspaper reported they may start a newsprint joint venture. The Stoxx 600 rose 0.1 percent to 258.5 at 3:47 p.m. in London, having swung between gains and losses at least 17 times. The measure rallied the most since May 27 yesterday as accelerating growth in U.S. and Chinese manufacturing eased concern that the economy may be sliding into another recession. The gauge is still 5 percent below this year’s high in April.
“The overall situation is quite shaky and the economy is still cooling down,” said Markus Steinbeis, head of equity portfolio management at the Unterfoehring, Germany-based unit of Pioneer Investments KGmbH, which oversees about $221 billion globally. Even so, as “lots of people are anticipating a bad September, the market could rise in the next couple of weeks.” U.S. Economy Labor Department figures today showed the number of Americans seeking jobless benefits fell by 6,000 to 472,000 last week, a level that indicates the labor market has not improved this year even as the economy expanded. Other U.S. reports showed the number of contracts to purchase previously owned houses unexpectedly increased in July and factory orders rose less than forecast.
The Stoxx 600 has surged 63 percent from a 12-year low in March 2009 as central banks around the world attempted to keep borrowing costs low. European Central Bank President Jean-Claude Trichet today extended emergency lending measures for banks into 2011, remaining in crisis mode amid the risk of a renewed U.S. recession. The ECB kept its benchmark lending rate at 1 percent for a 17th month, as predicted by all 57 economists in a Bloomberg News survey. National benchmark indexes climbed in 13 of the 18 western European markets.
France’s CAC advanced 0.4 percent while Germany’s DAX rose 0.1 percent and the U.K.’s FTSE 100 added 0.2 percent. The OMX Stockholm 30 Index slid 0.4 percent as Sweden’s central bank raised its benchmark lending rate for a second time since July. Pernod, Yara Pernod Ricard dropped 2.6 percent to 61.09 euros as the maker of Chivas Regal whiskey and Absolut vodka said net income in the year through June 30 rose 0.6 percent to 951 million euros ($1.2 billion). Profit was less than the 987 million-euro average estimate of 13 analysts surveyed by Bloomberg. Yara slid 2.5 percent to 249.6 kroner after Morgan Stanley downgraded the shares to “equal weight” from “overweight.”
Dufry Group, a Swiss operator of duty-free shops, sank 7.1 percent to 92.7 Swiss francs as its biggest shareholder, Advent International Corp., sold a third of its stake. Deutsche Bank AG tumbled 2.8 percent to 49.57 euros as BofA Merrill Lynch Global Research added Germany’s largest bank to its list of “least preferred” stocks today. Helvetia Slips Helvetia Holding AG, Switzerland’s fourth-biggest insurer, declined 2 percent to 332.75 francs after saying first-half profit fell 1.9 percent on lower income from investments and higher claims. Net income dropped to 155.5 million francs ($152.9 million) from a restated 158.5 million francs a year earlier, the company said. Stora Enso surged 4.4 percent to 6.64 euros, Holmen soared 6.5 percent to 210.3 kronor and Norske Skog jumped 9.8 percent to 9.90 kroner.
The three Nordic forestry companies are planning a joint newsprint venture, Finnish newspaper Helsingin Sanomat reported, without saying where it got the information. Stora Enso and Holmen said they’re not in discussions on a venture. Yell Group Plc rallied 16 percent to 18.21 pence, the most since February, amid speculation about a takeover bid for the publisher of the U.K.’s yellow pages directories. “M&A activity continues to fill the air,” David Buik, a London-based market strategist at BGC Partners, wrote in an e- mail. “Interested parties are suggesting that Yell might be for sale at around 30 pence” a share, he said.
Yell spokesman Jon Salmon said via phone today that the company doesn’t comment on market speculation. GN Store Nord A/S soared 8.8 percent to 41.9 kroner, the most since April. The world’s largest maker of mobile headsets said an Arbitration Tribunal in Vienna will announce its decision tomorrow on a claim from GN Store’s DPTG unit against Telekomunikacja Polska SA, Poland’s biggest phone company. U.K. homebuilders Taylor Wimpey Plc and Redrow Plc rose as Citigroup Inc. said earnings will probably be stable this year. Taylor Wimpey, the country’s second-largest homebuilder by volume, advanced 6.3 percent to 28.75 pence. Redrow, which Citigroup raised to “buy” from “hold,” gained 3.9 percent to 122.7 pence.
