European stocks rose, snapping the longest string of losses for the Dow Jones Stoxx 50 Index in a year. Technology shares including STMicroelectronics NV and Nokia Oyj led gains as Intel Corp. cut its backlog of chips. ASML Holding NV, Europe's No. 1 maker of semiconductor equipment, advanced after posting a fourth straight quarterly profit. Equity indexes were also boosted as oil retreated from a record, easing concern about rising energy costs. ``We expect stable growth in demand, and companies are confirming that,'' said Christian Heger, who as chief investment officer at HSBC Trinkaus Capital Management in Dusseldorf, Germany, helps manage $3.7 billion in European equities. ``If that's coupled with falling oil prices, you have a better environment for equities.'' The Stoxx 50 added 0.4 percent to 2723.59 as of 11:04 a.m. in London. The Stoxx 600 advanced 0.4 percent, as did the Euro Stoxx 50 Index for the 12 countries that use the euro.
The five-day, 1.5 percent drop by the Stoxx 50 was its longest losing streak since September 2003. Concern that companies are set to report disappointing profit growth for the third quarter, when oil prices gained 40 percent, is overdone, according to investors and strategists including Bill Dinning. ``The outlook for corporate profit looks good,'' said Dinning, an Edinburgh, Great Britain-based investment strategist for Aegon Asset Management U.K., which manages $53 billion.
National Benchmarks
Benchmark indexes gained in all the 18 Western European markets except Greece. France's CAC 40 Index rose 0.5 percent. Germany's DAX Index added 0.7 percent. The U.K.'s FTSE 100 Index increased 0.4 percent. December futures on the Euro Stoxx 50 rose 0.3 percent. Infineon, Europe's No. 2 chipmaker, gained 1.7 percent to 8.38 euros. STMicroelectronics, the region's largest, climbed 1.6 percent to 14.08 euros in Paris. Nokia advanced 1.8 percent to 11.31 euros. The biggest maker of mobile phones reports quarterly earnings tomorrow, the first Stoxx 50 company to do so for the third quarter. Intel, the world's No. 3 technology company by market value, added 3.6 percent in Germany. Chief Financial Officer Andy Bryant said yesterday the chipmaker is cutting inventory that ballooned to $3.2 billion in the second quarter. The backlog will decline this quarter as customers pare their own stockpiles, he said.
The U.S. company reported third-quarter sales of $8.47 billion, beating the average analyst estimate of $8.44 billion in a Thomson Financial survey. ``Intel is a bellwether company'' for the technology industry, said Sharon Bell, a London-based European strategist at Goldman, Sachs & Co. ``The market is focusing on the positive.''
ASML Profit
ASML rose 2 percent to 10.46 euros. Its third-quarter net income was 41 million euros ($50.5 million), compared with a loss of 31 million euros a year earlier, helped by cost cuts and higher sales. ASML forecast average prices for its chipmaking gear will gain as much as 24 percent this quarter from the third quarter. Excluding a charge, net income would have been 74 million euros. Sales rose 65 percent to 610 million euros. The Dutch company was expected to report net income of 76.8 million euros on sales of 619.8 million euros, the median estimate of 10 analysts in a Bloomberg survey showed. The profit forecast by the analysts excluded a charge of about 47 million euros.
Services, Software
Computer-service and software companies were also among the biggest gainers. Sage Group Plc, Britain's largest maker of accounting software, rose 2 percent to 169.75 pence. Getronics NV, the No. 1 Dutch corporate computer-network services provider, gained 1.8 percent to 1.66 euros. Yahoo! Inc., the owner of the world's second-most-used Internet search engine, forecast yesterday that 2004 operating income before depreciation and amortization will exceed the highest estimate it made three months ago. Third-quarter profit more than tripled amid higher advertising revenue. Oil futures in New York are set for the biggest two-day drop in a month. The International Energy Agency said record prices will curb demand in China and the rest of the world next year. Crude for November delivery fell as much as 0.7 percent to $52.14 a barrel in after-hours electronic trading, and was at $52.42 as of 11:03 a.m. London time. Yesterday, oil fell 2.1 percent after earlier rising to as much as $54.45, the highest intraday price since futures began trading in 1983.
Airlines Rebound
Air France-KLM Group, Europe's largest airline, added 0.8 percent to 12.73 euros. British Airways Plc, the second-biggest, advanced 2.8 percent to 205 pence. Both carriers' shares have slumped as oil's 63 percent rise in the last 12 months raised fuel costs. Carrefour SA slumped 3 percent to 34.96 euros, an 18-month low. The world's No. 2 retailer said after European had closed yesterday that annual profit will rise less than it had forecast because of price cuts aimed at reviving demand in France. Growth in per-share profit won't meet its goal of a double-digit increase this year, the company said. Today, Carrefour's shares were cut to ``sell'' from ``hold'' at Citigroup and were downgraded to ``neutral'' from ``buy'' by analysts at Merrill Lynch & co. The shares were the worst performers on the Stoxx 50. Casino Guichard-Perrachon SA, the other publicly traded French grocery chain, slipped 2.2 percent to 58.25 euros. The shares were cut to ``in-line'' from ``outperform'' by analysts at Goldman Sachs.
Mining Shares, JJB
Basic-resources stocks fell after analysts at JPMorgan, Chase & Co. reduced their rating on the industry to ``neutral'' from ``overweight.'' Copper, lead and nickel prices will decline next year as production begins to catch up with increased demand, the Economist Intelligence Unit predicted this week. BHP Billiton Plc, the world's biggest mining company, whose shares surged to a record last week, fell 2.7 percent to 583.5 pence. Rio Tinto Group, the world's No. 3 miner, lost 1.7 percent to 1478 pence in London. JJB Sports Plc, the U.K.'s largest sporting-goods retailer, plunged 19 percent to 198 pence after saying takeover talks are likely to fail and bad weather hurt sales.
``After entering into discussions with the third party, the board of JJB Sports has concluded that the approach is unlikely to lead to an offer that would reflect the fair value of the company,'' the retailer said in a statement. Micronas Semiconductor AG slumped 10 percent to 44.5 Swiss francs, the biggest decline in the Stoxx 600. The biggest Swiss maker of computer chips said fourth-quarter sales will drop from the previous three months as new orders plunged. Burberry Group Plc, the U.K. luxury-goods seller known for plaid-trimmed raincoats, rose 1.2 percent to 368.5 pence. It said first-half sales rose 8 percent as the company added products including ponchos and opened stores in cities such as Tokyo. ////www.bloomberg.com