Stocks in Europe, Asia Rise on Earnings; U.S. Futures Decline

By Adam Haigh

Aug. 29 (Bloomberg) -- Stocks in Europe and Asia rose as better-than-estimated earnings from Carrefour SA and PPR SA and a higher forecast from Nintendo Co. overcame concern that higher oil will hurt carmakers. U.S. index futures declined.

Carrefour, the world's second-biggest retailer, jumped 6.7 percent as demand in emerging markets boosted first-half profit. PPR climbed 4.9 percent after earnings more than doubled, helped by higher revenue at the Gucci luxury-goods brand. Nintendo soared 6.3 percent as the maker of the Wii video-game console lifted its profit forecast by 26 percent.

Europe's Dow Jones Stoxx 600 Index added 0.3 percent to 287.97 at 1:32 p.m. The index has climbed 1.5 percent in August, heading for its first advance in four months.

``The market is definitely performing better after the earnings reports,'' said Philippe Gijsels, Brussels-based senior equity strategist at Fortis Global Markets with $62 billion under management. ``Outside the financials, they continue to be fairly good which lends some support to the market.''

Stocks pared gains after a report showed personal income for people in the U.S. fell more than expected in July. Incomes dropped 0.7 percent, the first decrease since August 2005, and a steeper fall than the median forecast for a 0.2 percent decline.

Futures on the Standard & Poor's 500 Index fell 0.3 percent as Dell Inc. retreated after saying the U.S. slump in technology spending is moving abroad and Novell Inc. reported a wider loss.

The MSCI Asia Pacific Index climbed 2 percent, with JFE Holdings Inc., Japan's No. 2 steelmaker, rallying 4.7 percent after the nation's trade ministry said industrial production unexpectedly rebounded.

Bouygues, L'Oreal

The Stoxx 600 yesterday erased this month's losses after a U.S. economic report signaled companies are weathering higher inflation and $512 billion in credit-related losses. U.S. stocks climbed the most in three weeks yesterday following the data.

Bouygues SA gained as earnings topped estimates and the world's second-biggest builder predicted construction markets will improve in the second-half of 2009. L'Oreal SA fell after sales growth slowed.

Vietnam was the world's best-performing equity market this month on speculation the fastest inflation in Asia may be under control after consumer price increases slowed this month. The benchmark VN Index climbed 19 percent, the biggest advance among the 89 indexes monitored by Bloomberg during August.

Ukraine stocks led declines worldwide this month on concern tensions with Russia may escalate after President Dmitry Medvedev recognized Georgia's breakaway regions. The PFTS Index slumped 22 percent, surpassing Russia's RTS Index, the second- worst performing market worldwide, which retreated 17 percent.

Commodity Producers

The MSCI World Index has fallen 0.9 percent this month, led by a 6.4 percent slide among material stocks. A drop in commodity prices including copper and gold has undermined the earnings outlook for raw-material producers.

National benchmark indexes rose in 14 of the 18 western European markets. The U.K.'s FTSE 100 gained 0.4 percent, and France's CAC 40 climbed 0.5 percent. Germany's DAX Index was little changed.

Carrefour jumped 6.7 percent to 35.95 euros. First-half net income from recurring operations totaled 750 million euros ($1.1 billion), beating the 743 million-euro median of seven analysts in a Bloomberg survey.

PPR climbed 4.9 percent to 80.14 euros after saying first- half profit more than doubled on demand for luxury goods and a gain from selling YSL Beaute. Net income climbed to 779 million euros ($1.15 billion), beating the 327 million-euro median estimate of six analysts surveyed by Bloomberg.

Earnings Outlook

Concern rising oil prices and credit losses will stifle economic growth has led analysts to cut earnings estimates this year. Profit among companies in the Stoxx 600 will decline 2.1 percent on average in 2008, according to data compiled by Bloomberg, down from 11 percent at the start of 2008.

Analysts expect retailers to buck the trend, with earnings forecast to rise 4.8 percent this year, the data show. That compares with a 26 percent slump for financial firms, the worst outlook among groups in the benchmark Stoxx 600 index.

Nintendo jumped 3,000 yen to 50,800 in Osaka, extending gains after the company raised its full-year net income estimate by 26 percent.

JFE Holdings jumped 4.7 percent to 4,660 yen. Japan's factory output increased 0.9 percent in July from the previous month, when it fell 2.2 percent, the government said. The median estimate of 37 economists surveyed by Bloomberg News was for a 0.3 percent decline.

Daimler AG, the world's second-largest luxury carmaker, lost 1.2 percent to 39.95 euros. PSA Peugeot Citroen, Europe's second-biggest carmaker, sank 0.8 percent to 33.05 euros

Merrill Lynch & Co. downgraded Peugeot to ``underweight'' from ``neutral,'' saying the company may have to reduce its 2008 operating profit targets as growth slows.

Oil Gains

Crude oil is headed for its biggest weekly gain in almost two months as producers evacuated rigs ahead of Gustav, forecast to become the worst Gulf of Mexico hurricane since Katrina. Crude today climbed as much as $1.80, or 1.6 percent, to $117.39 in New York.

Technology stocks declined after Dell, the world's second- biggest maker of personal computers, said the U.S. slump in technology spending has moved to Western Europe and some Asian countries.

ASML Holding NV, Europe's largest manufacturer of semiconductor equipment, fell 2.2 percent to 16.25 euros. Dell dropped 9.6 percent to $22.80.

Novell fell 1.5 percent to $5.92 after the second-largest U.S. seller of Linux software reported a wider third-quarter loss because of costs to write down investments.

Bouygues added 1.1 percent to 41.59 euros after reporting second-quarter profit net income of 477 million, more than the 466 million euros estimated in a Bloomberg survey. Bouygues raised its full-year sales target to 32.5 billion euros, from 32.4 billion euros previously.

L'Oreal fell 3.7 percent to 67.26 euros. Sales at the world's largest cosmetics maker disappointed some analysts and the company reported the slowest profit growth in three years.

To contact the reporter on this story: Adam Haigh in London at ahaigh1@bloomberg.net