MW: Europe near session highs as Wall Street rallies
Generali soars after results, lifts Italy index
By William L. Watts, MarketWatch
FRANKFURT (MarketWatch) — European stocks traded near session highs Thursday as Wall Street appeared set to extend a historical winning streak after first-time claims for U.S. jobless benefits unexpectedly fell and wholesale prices rose in line with expectations.
The Stoxx 600 Europe Index XX:SXXP +0.90% rose 0.8% to 297.62, its highest level since June 2008.
“Equities resumed their upward trend in early trade this morning following a ninth consecutive up day for the Dow 30. Inevitably there will be much chatter today about the index potentially extending its winning streak to double digits,” said Matt Basi, head of U.K. sales trading at CMC Markets UK.
Banks and financials led the way higher, with insurer Prudential PLC UK:PRU +2.67% rising 2.6% to add to the previous day’s strong gain on the back of earnings results, while index heavyweight HSBC Holdings PLC UK:HSBA +1.68% HBC +2.67% HK:5 +0.89% advanced 1.5%.
The number of people applying for first-time U.S. jobless benefits fell by 10,000 to 332,000 in the week ended March 9—the second lowest level in five years. Economists surveyed by MarketWatch had forecast a rise to 350,000.
Separately, data showed the producer price index rose 0.7% in February, matching expectations. The Standard & Poor’s 500 index SPX +0.39% SPX +0.39% was just a few points from its record close set back in October 2007 as stocks climbed on that upbeat data.
Closer to home for European investors, European Union leaders prepared for a summit meeting due to get under way in Brussels on Thursday. Euro-zone finance ministers are scheduled to meet Friday to further discuss a bailout for Cyprus.
“I think a bailout program is fully priced into the markets at the moment but I think investors will be looking for some reassurance on the matter, given Greece’s exposure to the country and the potential for a run on the banks in Cyprus if lenders attempt to force losses on depositors,” said Craig Erlam, market analyst at Alpari in London.
BNP Paribas SA FR:BNP +1.18% rose 1.5%, while France’s CAC 40 stock index FR:PX1 +0.66% added 0.6% to 3,866.40.
Italy’s FTSE MIB stock index XX:FTSEMIB +2.09% bucked recent weakness to rise 2%, with shares of Assicurazioni Generali SpA IT:G +8.61% up nearly 8%, and the biggest gainer for the Stoxx 600.
Generali climbed after reporting that net profit for the year dropped by around 89%, with the results reflecting large fourth-quarter impairments as new Chief Executive Mario Greco moved to clean up the company’s balance sheet.
“We are simplifying our structure and adopting a more disciplined approach to managing the Group and its investments, as we refocus on our insurance business,” Greco said in a statement.
Germany’s DAX stock index DX:DAX +0.85% advanced 0.8% to 8,032.50. Shares of HeidelbergCement AG DE:HEI +2.24% rose over 3% after the company said it was aiming for higher revenue and operating income this year, boosted by demand in Asia, Africa and the U.S.
Shares of steelmaker ArcelorMittal NL:MT +2.23% FR:MT +2.23% MT +2.20% rose 2% in Amsterdam after analysts at Citibank upgraded its stock to buy from neutral.
“We believe there is now an opportunity to buy into the first potential steps towards a strategic overhaul for the company — dealing with the languishing European business,” the analysts said in a research note.
“Ultimately we would favor a separation of the European assets from the rest of the group, to aid consolidation in the region and give investors exposure to the stronger businesses in the company,” they said.
London’s FTSE 100 stock index UK:UKX +0.64% rose 0.5% to 6,511.20.
Other heavyweight gainers in London included telecom firm Vodafone Group PLC UK:VOD +1.13% , which added 1%, while Barclays PLC UK:BARC +1.05% gained 0.8% and grocer Tesco PLC UK:TSCO +2.34% advanced 2%.
Natural resource firms lost ground, with Rio Tinto PLC UK:RIO -2.38% off over 2%. Precious and base metals prices fell as the dollar and stocks rose.
William L. Watts is MarketWatch's European bureau chief, based in Frankfurt. Follow him on Twitter @wlwatts.
