European stocks gained, led by technology companies including ASML Holding NV and carmakers such as DaimlerChrysler AG, amid speculation earnings prospects don't warrant declines in the third quarter. ``Earnings in Europe are still strong,'' said Dirk Thiels, who manages $10.5 billion at KBC Asset Management in Brussels. ``Stocks are looking very cheap.'' The Dow Jones Stoxx 50 Index added 0.8 percent to 2690.05 as of 11:48 a.m. in London. The Stoxx 600 gained 0.7 percent, with all except one of the 18 industry groups rising. The Euro Stoxx 50, a benchmark for the 12 countries using the euro, rose 1.1 percent. The Euro Stoxx 50 declined 3 percent in the third quarter, ended yesterday, its biggest quarterly drop in seven. The Stoxx 50, which shed 0.7 in the quarter, yesterday fell 0.8 percent, its biggest drop in a month, after Merck & Co. withdrew its Vioxx painkiller and retracted a profit forecast. The Stoxx 600 lost 1.3 percent in the quarter, its first decline since the first three months of 2003. Analysts estimate earnings for companies in the Stoxx 600 may increase 27 percent this year, bettering last year's 20 percent, according to data compiled by Factset JCF Group, a London-based market researcher.
ASML, Europe's largest maker of semiconductor equipment, climbed 1.5 percent to 10.51 euros. The shares fell 1.9 percent yesterday. DaimlerChrysler, the world's fifth-largest carmaker, gained 1.9 percent to 33.79 euros. Its shares declined 1 percent yesterday.
Benchmarks Rise
Benchmarks rose in all 18 Western European markets except Ireland and Austria. The U.K.'s FTSE 100 Index gained 1.2 percent, poised for its highest close since July 1, 2002. France's CAC 40 Index added 1.2 percent and Germany's DAX Index advanced 1.1 percent. September futures on the Euro Stoxx 50 climbed 1.1 percent. Energy stocks rose after Merrill Lynch & Co. raised its fourth-quarter forecast for the price of oil in New York by 26 percent to $44 a barrel. BP Plc, Europe's biggest oil company, added 2 percent to 538 pence. Total SA, in Europe's third-biggest oil company, gained 1.2 percent to 166 euros. ``We tend to agree that oil prices won't decline any time soon,'' said Ivo Kovachev, a fund manager at Driehaus Capital Management in Prague, which oversees $408 million in international equities. Crude fell 0.2 percent to $49.52 a barrel in after-hours electronic trading on the New York Mercantile Exchange.
U.S. Consumer Sentiment
A final reading on September consumer sentiment from the University of Michigan, due today, is expected to rise to 96 from 95.9, the survey of economists showed. A preliminary reading released earlier this month showed the index dipped to 95.8. It reached a low for the year of 90.2 in May, after setting a three- year high of 103.8 in January. The report is scheduled for 9:50 a.m. Washington time. The Stoxx 50 has dropped less than 0.1 percent this week. The Stoxx 600 has added 0.2 percent in the period, and the Euro Stoxx 50 is up 0.6 percent. Nokia Oyj rose 1.5 percent to 11.25 euros. The world's largest mobile-phone maker was upgraded to ``in-line'' from ``underperform'' by Goldman Sachs Group Inc. analysts, who cited the expectation new products will restore handset gross margins. Akzo Nobel, OMX Akzo Nobel NV, the Netherlands' largest drugmaker, rose 2.4 percent to 29.11 euros after agreeing to pay $59.8 million to settle claims that its Organon unit improperly blocked cheaper generic versions of the antidepressant Remeron from reaching the U.S. market. ``We feel we got the patent in a lawful way. Nevertheless, we decided to settle this case as such litigations can be time consuming and expensive,'' Akzo Nobel spokesman Ian Cressie said in a telephone interview. OMX AB climbed 2.3 percent to 88.5 Swedish kronor. The biggest exchange in Scandinavia said it's in talks with Copenhagen Stock Exchange A/S to deepen co-operation and help create a single Nordic market. OMX is in talks to buy the Danish bourse, daily Dagens Industri reported, citing a person familiar with the situation.
UCB SA climbed 1.6 percent to 43.56 euros. Belgium's largest drugmaker will sell its chemicals business for 1.5 billion euros ($1.86 billion) to Cytec Industries Inc., a U.S. company that makes chemicals and materials for the aerospace and automotive industries. Warner Chilcott, Man Group Warner Chilcott Plc added 2 percent to 11.47 euros in Dublin. The Northern Ireland drugmaker that said last month it had been approached about a possible 1.5 billion-pound ($2.7 billion) takeover, said a second potential bidder has contacted the company. Shares of Man Group Plc, the largest publicly traded hedge fund manager, gained 3 percent to 1,225 pence after it bought back 400,000 shares to cancel. UBC Media Group Plc, a U.K. maker of radio programs, added 1 percent to 25 pence in London. The company said fiscal first-half sales at its commercial radio division climbed 23 percent and the outlook for the rest of the fiscal year is ``positive.'' HeidelbergCement AG, Germany's largest cement maker, gained 2.1 percent to 38.28 euros. Sika AG, Europe's biggest building chemicals maker, has acquired the concrete admixtures business belonging to Cementa AB, a HeidelbergCement unit. The purchase price wasn't disclosed. Northern Rock, Merloni Northern Rock Plc, the U.K.'s ninth-largest bank, climbed 2.5 percent to 728 pence after saying pretax profit will probably rise by at least 10 percent to 427 million pounds ($770.2 million) this year as it takes more market share from competitors. Shares of Merloni Elettrodomestici SpA, Europe's third- largest maker of home appliances, dropped to their lowest in more than a year after the company cut its earnings forecasts for this year. Shares slipped 12 percent to 11.70 euros, the lowest since August 2003, before being suspended from trading in Milan. The stock has slid 19 percent in the last six months. ///www.bloomberg.com