European stocks rose, led by retailers, after Merrill Lynch & Co. recommended investors increase their holdings of GUS Plc, Britain's largest seller of non-food goods. Suez SA paced gains by utilities as it was raised to ``buy'' at UBS AG. Energy companies climbed after Goldman, Sachs & Co. upgraded the industry. British Airways Plc, whose 12-month price forecast was increased by 12 percent at Dresdner Kleinwort Wasserstein, led advances by airlines. The Dow Jones Stoxx 50 Index added 0.4 percent to 2798.69 as of 10:04 a.m. in London. The Stoxx 600 climbed 0.4 percent and the Euro Stoxx 50, a benchmark for the 12 countries using the euro, increased 0.4 percent.
Benchmark indexes advanced in 15 of the 16 Western European markets that were calculating. Germany's DAX Index rose 0.5 percent and France's CAC 40 Index added 0.4 percent. The U.K.'s FTSE 100 Index slipped 0.02 percent. The Luxembourg exchange wasn't updating because of a technical problem, officials said. March futures on the Euro Stoxx 50 gained 0.1 percent. GUS, the owner of Argos stores in the U.K., climbed 2.7 percent to 750.5 pence. Merrill Lynch raised its recommendation on the shares to ``buy'' from ``neutral,'' with a 12-month price forecast is 820 pence per share. The brokerage cited a relative underperformance of the shares compared with peers. Shares of GUS have slipped 2.9 percent this year, compared with a 13 percent advance for the Stoxx 600 retail group. Suez, the world's second-biggest water company rose 1.7 percent to 17.63 euros. The stock was raised to ``buy'' from ``neutral'' by analysts at UBS.
Energy Stocks Rise
Energy stocks including BP Plc and Royal Dutch Petroleum Co. rose after Goldman Sachs raised its recommendation on the industry to ``neutral'' from ``underweight.'' BP, Europe's largest oil company, advanced 0.2 percent to 445.75 pence. Royal Dutch, which owns 60 percent of Royal Dutch/Shell Group, gained 0.5 percent to 40.53 euros. Shell Transport & Trading Co., which owns the rest, climbed 0.3 percent to 375.5 pence. Total SA, Europe's third-biggest oil company, increased 0.5 percent to 150.4 euros. British Airways, Europe's largest airline, gained 3.4 percent to 339 pence. Analysts at Dresdner raised their price forecast on the stock by 12 percent to 380 pence a share. Air France SA, the region's second-biggest carrier, rose 0.9 percent to 16.45 euros. Deutsche Lufthansa AG, Europe's No. 3, advanced 1.1 percent to 14.87 euros.
Share Buyback
UBS AG advanced 0.7 percent to 97.3 Swiss francs. Europe's biggest bank by assets plans to buy back as much as 6 billion francs ($4.7 billion) in shares over the next year to boost returns for investors. The shares representing 5.4 percent of Zurich-based UBS's capital will be canceled, the bank said today. Royal Ahold NV rose 0.4 percent to 7.42 euros. The world's third-largest retailer agreed to sell its Argentine Disco SA supermarket chain to Cencosud SA of Chile for about $315 million as it withdraws from Latin America. It expects to complete the sale by the end of 2004. Disco operates 237 stores in Argentina.
European Aeronautic Defense & Space Co., Europe's No. 1 aerospace company, lost 1.1 percent to 18.73 euros. It had fourth- quarter net income of 276 million euros ($342 million) on increased Airbus plane deliveries and reorganization of the space business. Profit was less than the 308 million-euro average estimate of 29 analysts surveyed by Thomson Financial. Thomson SA, the biggest seller of televisions in the U.S., gained 1 percent to 16.18 euros. The French company signed an agreement whereas it will sell its patents for DVD-video players to be produced in China. Chinese companies manufacture one in two DVD-video players in the world, Thomson said. Corporacion Mapfre SA slipped 1 percent to 11.86 euros. Spain's largest insurer said it plans to sell 501 million euros of new shares to finance European acquisitions, pay down debt and boost its capital. ///www.bloomberg.com