Credit Suisse, Roche and Deutsche Post advance; VW shares weaker
By Sarah Turner, MarketWatch
LONDON (MarketWatch) -- European shares edged higher Thursday, as earnings-related gains from companies such as banking giant Credit Suisse continued to cheer investors.
The Dow Jones Stoxx 600 index (ST:SXXP 215.90, +0.25, +0.12%) climbed 0.1% to stand at 215.89, the ninth straight day of gains for the benchmark.
The pan-European Stoxx 600 surged to levels not seen since last November this week as investors took on board more second-quarter earnings reports.
"The balance is slowly tilting to the upside. The first phase of the rise in equity markets was mainly based on an improvement in sentiment indicators. Then you need more positive hard economic data that is reflected in company guidance. Here we can say that the current earnings season has had a good start," said Tammo Greetfeld, equity strategist at UniCredit.
Thursday's earnings standouts included Credit Suisse Group (CH:CSGN 48.96, -0.90, -1.81%) (CS 47.94, +1.74, +3.77%) , shares of which added 4.7%.
The Swiss banking giant reported a forecast-beating 29% rise in second-quarter net income to 1.57 billion francs ($1.47 billion) and further strengthened its capital position. See full story.
Regional markets were weaker, but moves were small. The U.K.'s FTSE 100 index (UK:UKX 4,491, -2.76, -0.06%) moved down 0.1% at 4,490.57, the German DAX index (DX:DAX 5,118, -3.82, -0.07%) traded flat at 5,120.47 and the French CAC-40 index (FR:PX1 3,295, -9.87, -0.30%) declined 0.2% at 3,294.59.
U.S. stocks moved higher on Thursday. Asian shares had a mostly positive session. See Asia Markets.
Volkswagen in the spotlight
On the downside, shares of Volkswagen (DE:VOW 248.66, -0.72, -0.29%) fell 2.3%.
Confirming rumors swirling over the past week, Porsche Automobil Holding (DE:PAH3 50.56, -2.21, -4.19%) , down 2.5%, announced that long-serving Chief Executive Wendelin Wiedeking was leaving, paving the way for a deal with VW to rescue the sports-car maker from its debts.
A plan for Porsche to raise 5 billion euros suggests that Volkswagen won't be buying a 49% stake, as many news outlets had reported. See full story.
Shares of Swedish truckmaker Scania (SE:SCVA 82.75, +0.25, +0.30%) fell 5.1% after the firm swung to an unexpected second-quarter net loss of 150 million Swedish kronor amid continued weak demand. Last year, it posted a profit of 3.04 billion kronor.
More earnings
Although Credit Suisse reported a rise in profit, many companies have been reporting lower earnings or even losses. However, shares have still risen in many cases as companies manage to avoid disappointing investors.
A case in point was Swiss-Swedish engineering group ABB (CH:ABBN 17.99, +0.06, +0.33%) (ABB 16.91, +0.78, +4.84%) , whose shares added 3.3% in Zurich.
ABB reported a 31% drop in second-quarter profit to $675 million, though it still beat earnings expectations thanks to cost reductions. See full story.
Meanwhile, shares of Swiss pharmaceutical giant Roche Holding (CH:ROG 154.50, +1.60, +1.05%) (RHHB.Y 36.92, +0.75, +2.07%) rose 2.7%.
First-half net income declined 29% to 4.04 billion Swiss francs after charges related to Roche's takeover of biotech bellwether Genentech, but this beat analyst forecasts nonetheless.
The drugmaker also lifted its 2009 outlook. See full story.
Meanwhile, Deutsche Post (DE:DPW 10.17, +0.20, +2.01%) saw its shares jump 1.4%.
The company said that it expects 2009 net profit to substantially exceed 2008's figure, even as it posted a 71% drop in second-quarter net profit to 66 million euros. Again, this was better than the red ink that analysts had been anticipating.
