MW: European shares on track for third week of gains, BP up
Societe Generale, Reed Elsevier upgraded at Morgan Stanley
By Sarah Turner, MarketWatch
LONDON (MarketWatch) -- European shares edged higher on Friday, on track for a third straight weekly gain, with a rare advance from BP boosting the oil and gas sector.
The Stoxx Europe 600 index (ST:SXXP 249.36, +0.90, +0.36%) rose 0.6% to 249.97, up for the third straight day.
"As we move into the week's final trading session, equity markets are finding a degree of support and although this is being helped by some more positive news surrounding euro-zone debt concerns, optimism could well remain in short supply at least in the near term," said Ben Potter, strategist at IG Markets.
Weekly gains by Friday morning totaled 2.1%, paring year-to-date losses to 1.6%, in what could be the third straight week of gains for the index.
Shares advanced strongly on Thursday after successful Spanish and Italian debt auctions and banks, which are big holders of government debt, were higher again on Friday with shares of BNP Paribas (FR:BNP 44.87, +1.06, +2.42%) up 2.8% and shares of Societe Generale (FR:GLE 33.43, +0.77, +2.36%) up 2.6%.
Spain's seventh largest bank by assets, Banco de Sabadell (ES:SAB 3.42, +0.12, +3.67%) climbed 3.5% after it said that that it's in merger talks with smaller Banco Guipuzcoano (ES:GUI 5.34, +0.01, +0.19%) , a bank based in the Basque Country. Banco Guipuzcoano shares edged up 0.2%.
On the regional level, the U.K. FTSE 100 index (UK:UKX 5,146, +13.85, +0.27%) rose 0.2% to 5,144.20, the German DAX index (DX:DAX 6,056, -0.60, -0.01%) advanced 0.2% to 6,065.09 and the French CAC-40 index (FR:PX1 3,529, +12.49, +0.36%) climbed 0.4% to 3,530.29.
Asian stocks advanced and U.S. stock futures were pointing to a flat open on Wall Street, following strong gains on Thursday.
The euro traded flat against the dollar at $1.2125 while light sweet crude oil futures edged down 18 cents in electronic trading after surging 1.5% in New York.
Oil and gas firms gained, with Repsol (ES:REP 16.88, +0.27, +1.63%) (REP 20.33, +1.33, +7.00%) and Royal Dutch Shell (UK:RDSA 1,782, +20.50, +1.16%) (RDS.A 52.35, +1.61, +3.17%) shares both up 0.8%.
BP (UK:BP. 385.70, +20.20, +5.53%) (BP 32.78, +3.58, +12.26%) stood out, up 3.6% at 379 pence, paring quarter-to-date losses to just over 40%.
The oil could defer or cut its second-quarter dividend to help quell political uproar in the U.S. over the oil spill in the Gulf of Mexico, The Wall Street Journal reported, citing an interview with the company's CEO Tony Hayward.
Broker moves also helped selected firms to advance, with Reed Elsevier (UK:REL 490.80, +7.30, +1.51%) (RUK 28.14, +0.24, +0.86%) up 1.5% after Morgan Stanley lifted its rating on the publishing group to overweight from equal-weight, saying that while the stock faces some headwinds in 2010, improving underlying market conditions suggest a strong bounce back in 2011-2012.
Morgan Stanley also raised its view on French building-materials firm Saint Gobain (FR:SGO 32.30, +0.11, +0.33%) , up 1%, to overweight from underweight, citing a more benign pricing environment and raw materials cycle.
Saint Gobain was upgraded by Citigroup on Thursday.
