European, Asian Stocks Advance; Daimler, Toyota, BP Increase

By Adam Haigh

Dec. 15 (Bloomberg) -- Stocks in Europe and Asia gained after President George W. Bush signaled a decision on rescuing American carmakers would be swift, while a rally in oil prices lifted energy companies.

Daimler AG advanced 2.2 percent and Toyota Motor Corp. surged 9.8 percent as Bush said deliberations by his government on tapping the bank bailout fund to keep General Motors Corp. and Chrysler LLC out of bankruptcy “won’t be a long process.” BP Plc climbed 2.2 percent on higher crude prices. BNP Paribas SA sank 6.9 percent after a Belgian court froze the lender’s plans to buy Fortis and the bank said it has as much as 350 million euros ($474 million) at risk from Bernard Madoff’s investment- advisory business.

The Dow Jones Stoxx 600 Index added 0.5 percent to 199.12 at 1:50 p.m. in London as 14 of 19 industry groups increased. The MSCI Asia Pacific Index jumped 4.1 percent. Futures on the Standard & Poor’s 500 Index expiring in March fell 0.1 percent.

“In the medium term, the bailout would be a good thing,” said Thomas Haerter, chief strategist at Swisscanto Asset Management AG in Zurich, which manages about $60 billion. “There may be a bailout, but it cannot save the underlying problem,” he told Bloomberg Television.

The Stoxx 600 has rebounded 9.4 percent from a five-year low on Nov. 21 as governments and policy makers around the world announced packages to revive economic growth. U.S. President- elect Barack Obama said he is planning the most extensive public- works spending package since the 1950s.

The measure is still down 45 percent in 2008 as almost $1 trillion in bank losses and writedowns froze credit markets and the U.S., Europe and Japan entered the first simultaneous recessions since World War II.

Analysts’ Estimates

Analysts have slashed their earnings projections for companies in the Stoxx 600, estimating a 15 percent decline this year, compared with 11 percent growth forecast at the start of 2008. Profits in 2009 are expected to rise 0.9 percent.

Daimler, the world’s largest truckmaker, gained 2.2 percent to 24.59 euros. Toyota rallied 9.8 percent to 3,030 yen in Tokyo.

The Senate’s rejection of a $14 billion aid package for carmakers sparked a 2.7 percent decline in the Stoxx 600 on Dec. 12 and sent the dollar sliding against the euro.

Bush last night “signaled” his administration is considering using money from the $700 billion fund, saying he’s “not quite ready” to announce any rescue plan.

BP, Europe’s second-largest oil producer, advanced 2.2 percent to 527.5 pence. Total SA, the third-biggest, rose 2.4 percent to 40.74 euros.

Crude Oil

Crude oil increased after OPEC Secretary-General Abdalla El- Badri said the group needs to make a “sizeable” production cut at this week’s meeting in Algeria.

BNP sank 6.9 percent to 40.79 euros as a Belgian court froze the bank’s plans to buy Fortis for 14.5 billion euros.

Natixis SA, France’s worst-performing banking stock this year, said it has as much as 450 million euros of client funds invested with Madoff, who allegedly ran a “Ponzi scheme” that cost investors $50 billion. The shares retreated 4.3 percent to 1.42 euros.

HSBC Holdings Plc slipped 1.3 percent to 723.75 pence. Europe’s biggest bank said it has $1 billion at risk after providing financing to funds that invested with Madoff.

A report today may show U.S. industrial output dropped 0.8 percent in November after rising 1.3 percent in the previous month, according to the median estimate of 59 economists in a Bloomberg News survey.

Manufacturing

Separate figures showed manufacturing in New York contracted in December at the fastest pace on record as orders and shipments remained weak.

Since Oct. 7, quarterly earnings for the 334 companies in the Stoxx 600 that reported results fell 15 percent on average, trailing analysts’ estimates by 6.3 percent, Bloomberg data show. For the 474 companies in the S&P 500 that have reported results earnings sank 17 percent and missed projections by 4.2 percent, according to the data.

Companies in the S&P 500 are marking down assets at the fastest rate in six years, indicating it may be time to buy stocks. Operating profits are 46 percent higher than net income in the third quarter, a level last seen in 2003 when the previous bull market began.

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