MW: Europe stocks trade higher at end of difficult week
By Steve Goldstein, MarketWatch
LONDON (MarketWatch) -- Europe stocks closed higher Friday, taking some of the sting out of bruising mid-week losses, as a gloomy U.S. jobs report failed to derail a mild recovery.
After two days of big losses, the pan-European Dow Jones Stoxx 600 climbed 1.8% to 219.26. For the year, however, the Stoxx 600 is down close to 40%.
The U.K.'s FTSE 100 , a day after a 1.5 percentage point rate cut from the Bank of England, advanced 2.7% to 4,387.14.
Also higher were the German DAX 30 , which climbed 2.6% to 4,938.46, and the French CAC 40 , which rose 2.4% to 3,469.12
Europe stocks briefly turned lower before recovering, temporarily undermined by data showing that 240,000 U.S. jobs were lost in October, which was more than the already gloomy forecasts of economists, as well as another rise in the unemployment rate for the world's largest economy. See story.
"However you slice and dice this report, it is extremely weak," said analysts from RDQ Economics.
"The situation all told is a fairly grim one, there's no good news on the horizon for the economy or the market," added Peter Dixon, a strategist at Commerzbank in London.
That said, he doesn't see risks of particularly big falls for equities from here.
"I don't get the sense that investors are engaged in wholesale selling activity in the same way they were a month ago," Dixon said.
As the U.S. stock market recovered, however, investors bought up shares in Europe as well.
Basic resources and insurance plays led the recovery, as they usually do because of the mining sector's sensitivity to the world's economy and the big stock-market holdings of the insurers.
Rio Tinto , the world's second-largest miner, rose 4.5%.
AXA , the French insurer, rose 5.1%.
A last-minute trade sent shares of British insurer Legal & General up to 170 pence, a more than doubling of Thursday's price.
Munich Re was another advancer, climbing 6.9%. The reinsurance giant cut its earnings goal and reported a 99% profit drop for the third quarter.
But Munich Re said its capital base had remained solid at 21.5 billion euros -- the same level as three months earlier despite sharp declines in investment markets. See Munich Re story.
Shares of British Airways climbed 11.9% after saying it's on track to make a small operating profit in the fiscal year, up from a previous forecast of break even.
The group swung to a loss of 49 million pounds in the six months to Sept. 30 and lifted its view for non-fuel costs for the year. See British Airways story.
While General Motors and Ford Motor Co. recorded heavy losses in the third quarter, at least one European automaker put up a better performance.
Porsche Automobil rose 8.2% as the German automaker reported a 51% rise in annual profit in the year to July 31, buoyed by its buying of Volkswagen shares.
