Stocks in Europe, Asia Rise, Led by SocGen; U.S. Futures Fall

By Adam Haigh

Oct. 21 (Bloomberg) -- Stocks gained for a third day in Europe and Asia as France said it will invest $14 billion in banks and the U.S. moved toward a second stimulus package. U.S. index futures declined after Texas Instruments Inc. predicted earnings that missed analysts' estimates.

Societe Generale SA and BNP Paribas SA climbed more than 8 percent as the French government said it will buy subordinated debt issued by the country's six biggest banks. ABB Ltd. jumped 3.1 percent and CRH Plc rose 6.7 percent after the Bush administration withdrew its opposition to the idea of a new stimulus.

The MSCI World Index added 0.6 percent to 995.27 at 8:56 a.m. in London. The gauge jumped 4.4 percent last week, its biggest gain on record, as governments injected $2 trillion to bail out banks and stabilize the financial system.

``Sentiment is already slightly improving from the real crisis levels,'' said Lucy MacDonald, the London-based chief investment officer of global equities at RCM Ltd., which has about $100 billion. ``We are seeing huge amounts coming in to support the financial system. All the moves are in the right direction.'' MacDonald spoke in a Bloomberg Television interview.

Europe's Dow Jones Stoxx 600 Index advanced 1 percent, headed for its longest winning streak since August. The MSCI Asia Pacific Index jumped 2.1 percent, having its longest streak of gains in three month. Futures on the Standard & Poor's 500 Index slipped 1.1 percent.

U.S. stocks rose yesterday as Federal Reserve Chairman Ben S. Bernanke endorsed an economic stimulus package and Halliburton Co.'s profit topped estimates. Energy companies and consumer-goods producers led Asian shares higher today.

Money Markets

Money market rates dropped in Asia today. Hong Kong's three-month interbank lending rate, or Hibor, fell for a third day, tumbling 0.31 percentage point to 3.35 percent, its longest series of declines in more than a month. Singapore's three-month rate for U.S. dollar loans slid for a sixth day to 3.92 percent, the lowest this month.

The cost of borrowing in dollars for three months in London may decline about 21 basis points to 3.85 percent today, according to BGC Partners. The British Bankers' Association is set to release today's fixings after 11:30 a.m. local time.

The London interbank offered rate, or Libor, that banks charge each other for three-month loans in dollars yesterday slid 36 basis points to 4.06 percent, the biggest drop in nine months. The Libor-OIS spread, a measure of cash availability, dropped below 300 basis points for the first time in almost two weeks.

Societe Generale, France's second-biggest bank, climbed 10 percent to 48.50 euros. BNP Paribas, the nation's biggest bank, added 8 percent to 59.275 euros. Societe Generale and BNP along with four other banks will get 10.5 billion euros ($14 billion) from the French government, tapping for the first time the 360 billion-euro state rescue package unveiled this month.

New Push

ABB, the world's biggest maker of power networks, added 3.1 percent to 18.37 francs. CRH, the second-largest maker and distributor of construction materials, jumped 6.7 percent to 15.475 euros. Siemens AG, Europe's largest engineering company, gained 2.3 percent to 49.81 euros.

U.S. lawmakers and officials moved toward forging a second fiscal stimulus bill and White House Press Secretary Dana Perino said yesterday President George W. Bush was ``open to the idea'' of a new stimulus.

House Budget Committee Chairman John Spratt said a new push would be patterned after earlier proposals made by House Speaker Nancy Pelosi that extend jobless benefits, fund infrastructure projects such as road and bridge construction, and help cash- strapped state and local governments.

Since the initial $700 billion package was announced, unemployment has climbed to a six-year high and retail sales had their longest slump since at least 1992.

Texas Instruments

Texas Instruments, the second-largest U.S. chip maker, fell 7.2 percent to $16.69 in German trading. The company reported a 27 percent decline in third-quarter profit and said sales will drop as much as 20 percent this period.

ASML Holding NV, Europe's largest maker of semiconductor equipment, lost 1 percent to 12.17 euros and STMicroelectronics NV Europe's largest semiconductor maker, slid 2.9 percent to 6.41 euros.

Europe's Stoxx 600 was valued at 9.2 times the reported earnings of companies in the index yesterday, within 8 percent of the lowest level on record. The MSCI World Index traded for 12.1 times the profit of its 1,730 companies, while the S&P 500 was valued at 19.5 times earnings.

Actelion Ltd. jumped 5.1 percent to 58.45 francs as Switzerland's biggest biotechnology company said third-quarter profit rose because of increased sales of the Tracleer lung disease medicine.

Norsk Hydro ASA dropped 6.8 percent to 28.7 kroner after third-quarter profit from continuing operations slipped to 202 million kroner ($30.6 million), missing the 581 million-krone estimate from analysts surveyed by Bloomberg.

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