Tuesday, April 21, 2009

European Stocks, U.S. Index Futures Rise; Tesco, Burberry Climb

European stocks and U.S. index futures climbed as earnings from Tesco Plc and Burberry Group Plc to Texas Instruments Inc. reassured investors the economic slump may be easing.

Tesco, Europe’s second-biggest retailer, gained 4.6 percent after sales growth at U.K. stores open at least a year accelerated. Burberry surged 11 percent as Britain’s largest publicly traded luxury goods company reported revenue that beat analysts’ estimates. Texas Instruments, the second-biggest U.S. chipmaker, climbed 2.3 percent in after-hours New York trading.

Europe’s Dow Jones Stoxx 600 Index added 0.2 percent to 190.39 at 11:18 a.m. in London, paring yesterday’s 3.6 percent tumble. Stocks maintained gains after a report showed German investor confidence climbed to the highest in almost two years in April. The regional benchmark advanced 25 percent from March 9 through last week as investors speculated the U.S. government’s plan to finance the purchase of as much as $1 trillion in toxic assets from banks will help to pull the global economy out of its first recession since World War II.

“We are seeing some stabilization in the economy and there is a chance we may be close to the bottom,” said Philippe Gijsels, a senior structured equity strategist at Fortis Global Markets. “It’s possible we have another leg up in this bear- market rally.”

Credit Concerns

The Stoxx 600 posted the biggest decline in three weeks yesterday and the U.S. Standard & Poor’s 500 Index had its steepest tumble since March 2 as concern grew that credit losses at banks will increase and Bank of America Corp. increased reserves for future loan losses.

The MSCI Asia Pacific Index slipped 1.9 percent today, retreating from a three-month high, as China Mobile Ltd. announced lower-than-expected profit. Futures on the S&P 500 added 0.3 percent before earnings reports from companies from Caterpillar Inc. to Yahoo! Inc.

The ZEW Center for European Economic Research in Mannheim said its index of German investor confidence rose to 13 in April from minus 3.5 last month after stock markets rallied on government and central bank efforts to revive economic growth. Economists had expected a gain to 2, according to the median of 35 forecasts in a Bloomberg News survey.

Tesco gained 4.6 percent to 347.5 pence. Sales at U.K. stores open at least a year rose 3.4 percent excluding gasoline in the six weeks since the end of the fiscal year, Tesco said today, more than the fourth quarter’s 2.7 percent gain.

Burberry Gains

Burberry, the maker of $1,295 checked Lowry handbags, climbed 11 percent to 368.75 pence. Revenue in the three months ended March 31 climbed to 334 million pounds ($488 million). That beat the 318 million-pound median estimate of seven analysts surveyed by Bloomberg News.

A gauge of retailer shares on the Stoxx 600 gained 2.2 percent, the steepest increase among all 19 industry groups.

Texas Instruments added 40 cents to $17.72 after the official close of U.S. markets. First-quarter net income was $17 million, or 1 cent a share, the company said yesterday. Analysts had predicted a loss of 4 cents a share. The company forecast earnings this quarter will be as much as 15 cents a share, compared with the 1 cent average analyst estimate.

Actelion Ltd. climbed 10 percent to 53 Swiss francs, the steepest intraday gain since January 2008, after first-quarter profit more than doubled at Switzerland’s biggest biotechnology company on demand for the Tracleer lung treatment.

China Mobile Falls

China Mobile slid 5.1 percent to HK$70.50. First-quarter net income rose 5.2 percent to 25.2 billion yuan ($3.3 billion), the company reported yesterday, the slowest growth rate in five years. The result missed the 26.5 billion-yuan median estimate of five analysts in a Bloomberg survey.

International Business Machines Corp. slipped 2 percent to $98.42 in German trading. First-quarter revenue dropped 11 percent to $21.7 billion, the world’s biggest provider of technology services said late yesterday, falling short of an estimate of $22.6 billion in a Bloomberg survey of analysts.

Analysts estimate that profits at S&P 500 companies decreased for the seventh straight quarter in the January to March period, the longest stretch of declines since at least the Great Depression.

Conergy AG tumbled 39 percent to 1.01 euros, the steepest slide since its initial public offering in 2005, as Germany’s second-largest solar company posted a 307 million-euro ($398 million) loss including discontinued operations for the 2008 fiscal year.