Europe turns up after slow start
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Europe turns up after slow start
Europe turns up after slow start
Adidas gains on increasing optimism
By Steve Goldstein, CBS MarketWatch.com
Last Update: 5:27 AM ET Oct. 5, 2004
LONDON (CBS.MW) -- European markets turned higher Tuesday after a slow start, with markets now set for three consecutive gains, though advances were more evenly spread between defensive stocks such as utilities and cyclicals such as chemical stocks. The market gains came amid economic data underscoring the slow pace of economic expansion on the Continent.
The German DAX Xetra 30 index (DE:1876534: news, chart, profile) rose 0.9 percent at 4,069 and the French CAC 40 index (FR:1804546: news, chart, profile) gained 0.3 percent at 3,777.
Top gainers on the German and French indices included electricity provider RWE (DE:703712: news, chart, profile), up 1 percent, and chemicals group BASF (DE:515100: news, chart, profile) (BF: news, chart, profile), also up 1 percent.
Chip stocks such as Infineon Technologies (DE:623100: news, chart, profile) (IFX: news, chart, profile), after early losses, saw moderate gains. AMD's warning after-hours weighed negatively, though several other chip makers also have warned on third quarter sales. See story on AMD.
The euro was at $1.2285 vs. the dollar.
The number of unemployed in Germany rose by 27,000 in September from August to 4.256 million, AFX News reported from Frankfurt. The rise was larger than forecast by economists and is expected to push the adjusted unemployment rate to 10.7 percent.
British services PMI fell to 54.7 in September from 56.9 in August, which fell below analyst expectations of 56.5. The Reuters/NTC Research eurozone services PMI also declined, down to 53.3 in September from 54.5 in August. A reading above 50 indicates expansion.
Dan Bunting, a strategist at Dryden Financial in London, said the poor economic backdrop makes European equities less attractive than some data implies.
"Regarding European equities, ratings are ostensibly below American levels. Frankly, however, the discount more than vanishes the moment one factors into the discounted cash flow maths the differential rates of population and economic growth either side of the Atlantic," he said in a note to clients.
Adidas-Salomon, which is holding an investor presentation (see below), said German consumption may pick-up in the middle of 2005 as the World Cup nears.
"Over the next three to six months there are not big hopes that consumption will pick up," said CEO Herbert Hainer.
Roche lower on Genetech suit
Roche (RHHDY: news, chart, profile) fell 0.1 percent as unit Genentech (DNA: news, chart, profile) late last night said it was subpoenaed over its cancer drug Rituxan, related to its promotion in treating non-Hodgin's lymphoma. See story.
Credit Suisse (CSR: news, chart, profile) gained 1.8 percent as the Financial Times Deutschland said it has sent an "invitation for offers" to major European and U.S. insurers and financial institutions for its Wintherthur insurance business. Credit Suisse hopes to sell the Germany-based unit for $6.14 billion, the newspaper reported. See story.
Adidas-Salomon (DE:500340: news, chart, profile) rose 1.9 percent as Hainer sounded an upbeat tone after hiking earnings estimates twice during the year, saying there's no reason why it can't top its 10 percent operating margin target for 2006. He adding that he preferred lifting the company's dividend to share buybacks or acquisitions for 2004, and indicated that the sporting goods maker may lift the top end of its dividend payout ratio to 25 percent from 20 percent.
Hainer said the apparel industry needs to lift prices. "Nike (NKE: news, chart, profile), Reebok (RBK: news, chart, profile), retailers, everyone, must have an interest in bringing prices up, otherwise no one will make any money," he said.
Adidas confirmed a Financial Times report of a $100 million, 10-year sponsorship of the U.S. soccer league Major League Soccer.
Water utility Veolia Environnement (FR:012414: news, chart, profile) (VE: news, chart, profile) rose after it won two Chinese deals worth a total of 790 million euros ($969 million). A 600 million euro contract will last 30 years, while a 190 million euro contract will be over 22 years, it said. Shares rose 1.1 percent.
Adidas gains on increasing optimism
By Steve Goldstein, CBS MarketWatch.com
Last Update: 5:27 AM ET Oct. 5, 2004
LONDON (CBS.MW) -- European markets turned higher Tuesday after a slow start, with markets now set for three consecutive gains, though advances were more evenly spread between defensive stocks such as utilities and cyclicals such as chemical stocks. The market gains came amid economic data underscoring the slow pace of economic expansion on the Continent.
The German DAX Xetra 30 index (DE:1876534: news, chart, profile) rose 0.9 percent at 4,069 and the French CAC 40 index (FR:1804546: news, chart, profile) gained 0.3 percent at 3,777.
Top gainers on the German and French indices included electricity provider RWE (DE:703712: news, chart, profile), up 1 percent, and chemicals group BASF (DE:515100: news, chart, profile) (BF: news, chart, profile), also up 1 percent.
Chip stocks such as Infineon Technologies (DE:623100: news, chart, profile) (IFX: news, chart, profile), after early losses, saw moderate gains. AMD's warning after-hours weighed negatively, though several other chip makers also have warned on third quarter sales. See story on AMD.
The euro was at $1.2285 vs. the dollar.
The number of unemployed in Germany rose by 27,000 in September from August to 4.256 million, AFX News reported from Frankfurt. The rise was larger than forecast by economists and is expected to push the adjusted unemployment rate to 10.7 percent.
British services PMI fell to 54.7 in September from 56.9 in August, which fell below analyst expectations of 56.5. The Reuters/NTC Research eurozone services PMI also declined, down to 53.3 in September from 54.5 in August. A reading above 50 indicates expansion.
Dan Bunting, a strategist at Dryden Financial in London, said the poor economic backdrop makes European equities less attractive than some data implies.
"Regarding European equities, ratings are ostensibly below American levels. Frankly, however, the discount more than vanishes the moment one factors into the discounted cash flow maths the differential rates of population and economic growth either side of the Atlantic," he said in a note to clients.
Adidas-Salomon, which is holding an investor presentation (see below), said German consumption may pick-up in the middle of 2005 as the World Cup nears.
"Over the next three to six months there are not big hopes that consumption will pick up," said CEO Herbert Hainer.
Roche lower on Genetech suit
Roche (RHHDY: news, chart, profile) fell 0.1 percent as unit Genentech (DNA: news, chart, profile) late last night said it was subpoenaed over its cancer drug Rituxan, related to its promotion in treating non-Hodgin's lymphoma. See story.
Credit Suisse (CSR: news, chart, profile) gained 1.8 percent as the Financial Times Deutschland said it has sent an "invitation for offers" to major European and U.S. insurers and financial institutions for its Wintherthur insurance business. Credit Suisse hopes to sell the Germany-based unit for $6.14 billion, the newspaper reported. See story.
Adidas-Salomon (DE:500340: news, chart, profile) rose 1.9 percent as Hainer sounded an upbeat tone after hiking earnings estimates twice during the year, saying there's no reason why it can't top its 10 percent operating margin target for 2006. He adding that he preferred lifting the company's dividend to share buybacks or acquisitions for 2004, and indicated that the sporting goods maker may lift the top end of its dividend payout ratio to 25 percent from 20 percent.
Hainer said the apparel industry needs to lift prices. "Nike (NKE: news, chart, profile), Reebok (RBK: news, chart, profile), retailers, everyone, must have an interest in bringing prices up, otherwise no one will make any money," he said.
Adidas confirmed a Financial Times report of a $100 million, 10-year sponsorship of the U.S. soccer league Major League Soccer.
Water utility Veolia Environnement (FR:012414: news, chart, profile) (VE: news, chart, profile) rose after it won two Chinese deals worth a total of 790 million euros ($969 million). A 600 million euro contract will last 30 years, while a 190 million euro contract will be over 22 years, it said. Shares rose 1.1 percent.
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