Strong Earnings Help Europe Shares Revive Rally
July 29, 2010 20:31
European stocks rose as improving earnings from Telefonica SA to Cap Gemini SA outweighed a Federal Reserve report that showed growth slowed in some areas of the economy. U.S. index futures and Asian shares gained.
Telefonica, Europe’s second-biggest phone company, and Cap Gemini, the region’s largest computer-services company, gained more than 3 percent. France Telecom SA jumped 5.6 percent after saying it will maintain its dividend. AstraZeneca Plc rallied 4.9 percent after winning U.S. backing to sell its experimental blood-thinner Brilinta.
The Stoxx Europe 600 Index advanced 0.5 percent to 258.56 at 12:02 p.m. in London, the seventh increase in eight days. The gauge has rallied 11 percent from this year’s low on May 25 as better-than-estimated company earnings and demand at auctions of Greek, Spanish and Portuguese debt eased concern that Europe’s debt crisis may derail the economic recovery.
“Earnings releases have been positive and underscore the health of the corporate sector,” Jeffrey Palma, a global equity strategist at UBS AG in Stamford, Connecticut wrote in a report. “Macro data have been mixed, but have surprised consistently to the upside in Europe. On balance we see a sustained growth recovery.”
Reports today showed European confidence in the economic outlook rose to the highest level in more than two years in July and German unemployment declined for a 13th straight month as an export-led recovery gathers strength.
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