Thursday, 26 April 2012 - 20:40
WSJ: Small Gains for European Stocks on Mixed Earnings
By Sara Sjolin
LONDON -(Dow Jones)- European shares ended mostly higher, as well-received earnings from Royal Dutch Shell and Volkswagen helped counter a steeper-than-expected drop in euro-zone economic sentiment and weak earnings from other companies.
The Stoxx Europe 600 index edged up 0.1% to 257.20, its third consecutive gain. U.S. markets were slightly firmer as European markets closed.
The European Commission reported that its overall economic sentiment indicator fell sharply to 92.8 in April, the lowest level in over a year and from 94.5 in March. The drop reflected a weaker outlook across all but one of the sub-sectors.
Martin van Vliet, an economist at ING Bank, said the uptick in sentiment seen earlier in the year, largely following the European Central Bank's long-term refinancing operations, has started to ebb.
"Confidence has started to deteriorate again in recent months, dealing a blow to those believing that fiscal austerity programs would improve confidence," Mr van Vliet said. "With more austerity in the pipeline, and the debt crisis still unresolved, any significant pick-up in economic confidence in the remainder of this year might fail to occur."
The U.K.'s FTSE 100 gained 0.5% to 5748.72, Germany's DAX added 0.5% to 6739.90 and France's CAC-40 slipped 0.1% to 3229.32.
Among stocks, Volkswagen surged 8.7% after the auto maker beat analyst expectations for first-quarter earnings and confirmed its forecast for the year. Volkswagen shares surge as earnings beat estimates.
Royal Dutch Shell jumped 3.5% as its adjusted profit for the first quarter topped expectations.
But Alcatel-Lucent plunged 17%. The company reported a 12% drop in first-quarter revenue and warned that the outlook for Europe and North America remains uncertain.
Deutsche Bank shed 2.8% after reporting a 33% drop in first-quarter profit. Banco Santander dropped 3.4% after reporting a 24% drop in first-quarter profit as its provisions for bad loans jumped.
Among other banks, Commerzbank fell 1.7% in Frankfurt, while CrÃ©dit Agricole lost 3.2% and SociÃ©tÃ© GÃ©nÃ©rale gave up 3.5%, both in Paris.
Vivendi rose 4% following a Bloomberg News report that the company may split into two units. In a statement, Vivendi denied it was planning such a move.
Fresenius recovered from early losses after it made an all-cash offer for hospital operator Rhoen-Klinikum and ended up 2.8%. Rhoen-Klinikum skyrocketed 44%.
AstraZeneca skidded 6.1% after Chief Executive David Brennan announced his resignation following lower-than-expected first-quarter earnings and a cut in full-year profit target.
Italian auto maker Fiat fell 5.1%, despite reporting a surge in first-quarter net profit. A strong performance for the U.S. Chrysler business was clouded by a disappointing performance in Europe.
Unilever gained 2.8%, after beating sales expectations for first quarter.
Portuguese retailer Jeronimo Martins slumped 5.1% as its first-quarter fell short of some analysts' expectations.
German pharmaceutical and chemical company Bayer gained 1.5% after its sales and net profit for the first quarter came in ahead of expectations.
In the currency market, the euro firmed to $1.3232, from $1.3217 late Wednesday in New York.
Elsewhere, light, sweet crude for June delivery was up $0.54 or 0.5% at $104.66 on the New York Mercantile Exchange as European markets closed. Most actively traded gold for June delivery on the Comex division of the New York Mercantile Exchange was up $14.30 per ounce or 0.9% at $1656.60.
--Andrea Tryphonides contributed to this article.
(END) Dow Jones Newswires
April 26, 2012 13:40 ET (17:40 GMT)
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