Alcatel-Lucent, Unilever advance after reporting earnings
By Sarah Turner, MarketWatch
ONDON (MarketWatch) - European shares advanced for a third straight session on Thursday, as investors took on board central bank action to support economies around the world and cheered earnings from Alcatel-Lucent and Unilever.
The pan-European Dow Jones Stoxx 600 index rose 2.3% to 264.56, the third straight day of gains for the index.
Miners rallied as commodity prices climbed, with Xstrata shares up 11.2% and Rio Tinto shares up 7.3%.
BHP Billiton umped 6.5% as it said that it wouldn't change its offer for Rio Tinto.
Gold futures were up $18.30 at $772.10 an ounce, while oil futures rose $1.20 to $68.75 a barrel.
"Commodities are moving sharply higher today in tandem with equities on improved sentiment following Chinese and U.S. interest rate cuts and other monetary easing moves around the world, " noted Joel Crane at Deutsche Bank. Investors believe lower interest rates will improve the demand outlook, he noted.
China and the U.S. Federal Reserve cut interest rates on Wednesday, swiftly followed by Taiwan, while South Korea and Singapore opened a swap facility with the U.S. Federal Reserve to give them access to U.S. dollar liquidity. See Asia Markets.
The central bank action comes against a gloomy backdrop for the global economy.
GDP figures from the U.S. are out Thursday and could show a drop of 0.5%. Downbeat data from Europe showed that economic sentiment across the 15-nation euro zone fell sharply in October, while U.K. house prices fell again in October, according to data from the Nationwide. See full story.
"Given the economy's woes we doubt that this will mark the end of the policy loosening," said James Knightly, economist at ING.
U.S. stock futures traded higher on Thursday, with the Dow Jones Industrial Average contract up 317 points. See Indications.
On a national level in Europe, the U.K. FTSE 100 index rose 1.7% to 4,313.71, the French CAC-40 index advanced 1.3% to 3,445.13, while the German DAX 30 index rose 4.1% to 5,008.04, with Volkswagen shares up 11.6%.
Volkswagen shares surged 348% on the first two days of the week on short-covering activity tied to Porsche's announcement of an increased equity stake and options that give the sportscar maker 74% control of the Wolfsburg maker of the Beetle.
