SF: European Stocks Gain on Economic Confidence as Yen Strengthens
Jan. 8 (Bloomberg) -- European stocks rose after economic confidence increased more than forecast, while U.S index futures swung between gains and losses as investors awaited the start of earnings season. The yen strengthened and gold advanced.
The Stoxx Europe 600 Index added 0.2 percent at 8:50 a.m. in New York. Standard & Poor’s 500 Index futures slipped 0.2 percent after sinking as much as 0.3 percent. The yen appreciated 0.3 percent versus the dollar after touching a 2 1/2-year low last week. Sweden’s krona fell after the central bank said the economy is slowing. Treasuries were little changed before three debt sales this week, starting with a $32 billion note auction today. Gold rose for the first time in four days.
A gauge of euro-region executive and consumer sentiment rose to 87 last month, exceeding the 86.3 median of 24 estimates in a Bloomberg survey. Alcoa Inc. will unofficially start the U.S. earnings reporting season after the market closes today. Japan’s Finance Minister Taro Aso said the government will use reserves to buy euro-denominated sovereign debt to weaken the yen, while stopping short of signaling direct euro purchases.
“I’m optimistic for 2013,” said Arnaud Scarpaci, a fund manager at Montaigne Capital in Paris, which oversees $225 million. “There are a lot of excellent companies whose shares have been left behind. We will be watching U.S. earnings reports. In the third quarter, we had been expecting many disappointments that never took place.”
Three shares rose for every two that declined in the Stoxx 600. Debenhams Plc sank 6 percent after the second-largest U.K. department-store chain cut its goal for annual profit-margin growth as it stepped up discounting.
Vodafone Climbs
Vodafone Group Plc gained 2.5 percent, the most in five months, as the Wall Street Journal reported that Verizon Communications Inc. Chief Executive Officer Lowell McAdam said buying the U.K. company’s stake in their Verizon Wireless joint venture is feasible. TGS Nopec Geophysical ASA rallied 6.9 percent as the Norwegian offshore surveyor forecast 2012 revenue that exceeded analysts’ estimates.
The S&P 500 retreated 0.3 percent yesterday. Fourth-quarter profits at companies in the measure probably grew an average 2.9 percent, according to data compiled by Bloomberg. Excluding financial companies, income increased 0.5 percent.
Alcoa, the largest U.S. aluminium producer, will today report fourth-quarter profit after one-time items of 6 cents a share, according to the average of 19 analysts’ estimates compiled by Bloomberg, compared with a year-earlier loss of 3 cents. Earnings in 2013 will more than double to 65 cents a share while the aluminum price will rise 6.4 percent, the estimates show.
Yen Gains
The yen gained against all its 16 major peers. Japan’s currency has climbed 0.8 percent against the dollar this week after touching 88.41 on Jan. 4, the weakest level since July 2010. The yen’s 14-day relative strength index against the dollar was below the 30 level that traders view as a signal that an asset’s price has fallen too fast.
The krona weakened against all its major peers, declining 0.7 percent per euro.
“New information received since the monetary policy meeting in October indicates that the Swedish economy is slowing down more sharply than was assessed then,” minutes of the Dec. 17 meeting of Riksbank policy makers published today said.
Treasuries had their worst start to a year since 2009, Bank of America Merrill Lynch indexes showed. U.S. government securities handed investors a 0.7 percent loss in 2013 as of yesterday. Benchmark 10-year yields held at 1.90 percent today.
The yield on Ireland’s five-year note was little changed at 3.33 percent as the nation began selling securities via banks for the first time in three years.
Gold, Oil
Gold climbed 0.3 percent to $1,652.60 an ounce after falling 2.4 percent since Jan. 3. Oil in New York advanced 0.3 percent to $93.50 a barrel before the American Petroleum Institute’s inventory report today.
The MSCI Emerging Markets Index fell 0.3 percent, declining for a third day, as results from Samsung Electronics Co. and HTC Corp. disappointed some investors. South Korea’s Kospi Index slid 0.7 percent and Taiwan’s Taiex lost 0.4 percent. The Shanghai Composite Index slid 0.4 percent and the Hang Seng China Enterprises Index of mainland companies listed in Hong Kong sank 2.2 percent, the most in two months. Russia’s Micex Index jumped 2.4 percent on the first day of trading this year and Turkish stocks gained for a second day after a report showed a pickup in industrial output. Brazil’s Bovespa index slid 0.1 percent.
--With assistance from Adria Cimino in Paris, Claudia Carpenter, Paul Dobson, Andrew Rummer and Michael Shanahan in London. Editors: Stephen Kirkland, Stuart Wallace
To contact the reporters on this story: Richard Frost in Hong Kong at rfrost4@bloomberg.net; Stephen Kirkland in London at skirkland@bloomberg.net
To contact the editor responsible for this story: Stuart Wallace at swallace6@bloomberg.net
