European stocks climbed as companies from Apple Inc. to Fiat SpA and Accor SA reported better-than- estimated results. Asian shares and U.S. index futures gained. ARM Holdings Plc rallied 3.3 percent after Apple posted a 78 percent surge in third-quarter profit. Fiat rose more than 5 percent after the carmaker’s trading earnings topped analysts’ forecasts. Accor surged 5.3 percent after sales at Europe’s largest hotel company beat estimates. SSL International Plc jumped 33 percent after Reckitt Benckiser Group Plc agreed to buy the condom maker for 2.5 billion pounds ($3.83 billion). The Stoxx Europe 600 Index rose 1.7 percent to 250.41 at 12:33 p.m. in London, the biggest gain in a week. The benchmark gauge is still down 8 percent from this year’s high on April 15 on concern about the strength of the global economic recovery as indebted European governments slash spending. “We’ve got a war of attrition going on between the non- believers who are focused on economic data and others who say if companies are doing well I want to be a part of it,” said David Buik, a London-based market strategist at BGC Partners. “We’ve also had good earnings out of the U.S. Investors are today deciding it’s better to own it than not.” U.S. stocks rallied for a second day yesterday, erasing earlier losses as speculation the Federal Reserve will take steps to spur lending and an increase in building permits sent homebuilders and commodity producers higher. Futures contracts on the Standard & Poor’s 500 Index rose 0.3 percent today, while the MSCI Asia Pacific Index gained 0.3 percent. Bernanke Testimony Fed Chairman Ben S. Bernanke today delivers his semi-annual report on monetary policy to the Senate Banking Committee and will testify at the House Financial Services Committee tomorrow. The S&P 500 has gained 6 percent since July 2 on optimism about corporate earnings. Of the 57 companies in the gauge that have reported since July 12, all but 10 beat earnings-per-share forecasts, Bloomberg data shows. Apple climbed 3.8 percent to $261.41 in German trading after the maker of the iPhone forecast fourth-quarter sales that topped analysts’ estimates and posted third-quarter revenue and profit that also exceeded predictions. ARM, the U.K. designer of semiconductors used in Apple products, rallied 3.3 percent to 310.5 pence in London. Yahoo! Inc. also reported results after the close of U.S. markets yesterday. The shares slid 5.6 percent to $14.35 in Germany after second-quarter sales missed analysts’ estimates. U.S. Earnings While second-quarter net income of S&P 500 companies have topped analysts’ projections by 13 percent on average, revenue has been only 3.6 percent more than estimated, according to Bloomberg Data. Fiat rallied 5.4 percent to 9.55 euros after Italy’s biggest automaker returned to profit in the second quarter on higher sales of trucks and agricultural machines and said it may raise its forecast later this year. Earnings before interest, taxes and one-time gains or losses, which Fiat calls trading profit, more than doubled to 651 million euros ($840 million), beating the 359 million-euro average analyst estimate in a Bloomberg survey. Net income was 90 million euros, compared with a 168 million-euro loss a year earlier. Accor climbed 5.3 percent to 24.42 euros after first-half sales rose 6 percent to 2.85 billion euros. Excluding the services unit, which was spun off this month, second-quarter revenue increased to 1.72 billion euros from 1.57 billion euros a year earlier, beating the 1.64 billion-euro average estimate from four analysts surveyed by Bloomberg. SSL Surges SSL jumped 33 percent to 1,178 pence after Reckitt Benckiser offered to buy the maker of Durex condoms and Scholl shoes for 1,163 pence a share. SSL shareholders will also be entitled to a proposed final dividend of 8 pence a share. Reckitt Benckiser Group advanced 3.5 percent to 3,302 pence. BHP Billiton Ltd. gained 2.9 percent to 1,926 pence as the world’s largest mining company said fourth-quarter iron ore production rose to 31.2 million metric tons, driven by expansions at its Australian mines and surging global steel demand. BP Plc climbed 3.3 percent to 400.12 pence after the company battling a record oil spill in the Gulf of Mexico agreed to sell assets in North America and Egypt to Apache Corp. for $7 billion as part of its plan to raise cash to fund liabilities. BP Chief Separately, the London-based Times reported that Robert Dudley is the front-runner to replace Chief Executive Officer Tony Hayward, who is set to step down in the next 10 weeks. The newspaper cited unnamed people close to the company. Hayward has the full support of the board and will stay in office, a BP spokesman said. Roche Holding AG sank 4.1 percent to 137.2 Swiss francs, the lowest level since April 2009, after scientific advisers to the Food and Drug Administration voted 12-1 to rescind Avastin’s clearance in breast cancer. The panel found that the drug paired with chemotherapies didn’t work better than other medicines alone. The agency usually follows panels’ advice, though it isn’t required to do so. Roche said it will continue to discuss data with the FDA. Smith & Nephew Plc, Europe’s largest maker of shoulder and knee implants, dropped 4.3 percent to 561 pence after Citigroup Inc. sold 8 million shares for an institutional investor. The shares were placed at 559 pence apiece, according to terms of the deal obtained by Bloomberg News. Ocado Group Plc, the loss-making U.K. online grocer, sank 8.9 percent to 164 pence on the first day of conditional trading in London after skepticism over the valuation led the company to reduce the price for its initial public offering. To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.

Source