Most Stocks in Europe, Asian Shares Advance; U.S. Futures Drop

By Sarah Jones

Dec. 9 (Bloomberg) -- Most stocks in Europe and Asian shares rose, extending a global rally, as optimism that stimulus plans will boost the economy lifted retailers and automakers, while German investor confidence improved. U.S. index futures fell.

PPR SA, owner of the Gucci luxury-goods brand, and Daimler AG, the world’s second-largest maker of luxury cars, jumped more than 5 percent. China Cosco Holdings Co., the biggest operator of iron-ore and coal ships, surged 12 percent in Hong Kong after bulk-shipping rates climbed for the first time in 14 days.

Europe’s Dow Jones Stoxx 600 Index added 0.1 percent to 202.77 at 1:53 p.m. in London as 12 of 19 industry groups advanced. The MSCI Asia Pacific Index increased 0.8 percent. Standard & Poor’s 500 Index futures expiring this month declined 0.5 percent.

“The downside risk on equity markets is now quite low and the technical rally we have had over the past few days could extend into January,” said Bob Parker, vice chairman of Credit Suisse Asset Management in London, which oversees about $600 billion. “Very low interest rates and expectations of lower interest rates are driving investors, who are cash rich, back into equities,” he told Bloomberg Television.

The MSCI World Index has climbed 16 percent since Nov. 20 as governments from the U.S. to India announced stimulus plans to buoy the global economy and prevent earnings from tumbling. President-elect Barack Obama is planning the biggest public-works spending package since the 1950s. The S&P 500’s 3.8 percent rally yesterday extended a rebound to 21 percent from last month, marking a technical end to the 13-month bear market.

German Investor Confidence

Germany’s ZEW Center for European Economic Research said its index of investor and analyst expectations for Europe’s largest economy rose to minus 45.2 this month from minus 53.5 in November. Economists in a Bloomberg News survey expected a drop to minus 57.

Technology shares led earlier declines in Europe after forecasts from Texas Instruments Inc. and National Semiconductor Corp. disappointed investors. Q-Cells SE sank 23 percent as the world’s largest maker of solar cells reduced its profit forecasts for this year and 2009.

The Stoxx 600 Index has slumped 44 percent this year as more than $31 trillion has been erased from the value of global equities and credit-related losses and writedowns at banks and insurers approach $1 trillion.

PPR led retail shares higher today, rallying 9 percent to 39.97 euros. Home Retail Group Plc, owner of Britain’s Argos stores, jumped 4.8 percent to 238.5 pence. Carrefour SA, Europe’s biggest retailer, added 3.2 percent to 29.89 euros.

Stock Options

LVMH Moet Hennessy Louis Vuitton SA, the world’s largest maker of luxury goods, jumped 5.3 percent to 48.22 euros. Chairman Bernard Arnault purchased 1 million stock options in main shareholder Christian Dior SA. Arnault, the biggest investor in LVMH and Dior, bought the Dior options for 5.11 euros each on Nov. 28, according to a statement from France’s market regulator.

Daimler rose 5 percent to 25.83 euros, pacing gains among automakers. Renault SA, France’s second-largest carmaker, increased 2.6 percent to 18.33 euros. Fiat SpA, Italy’s biggest, climbed 4.2 percent to 5.59 euros.

In Asia, China Cosco surged 12 percent to HK$6.01. Nippon Yusen K.K. jumped 6 percent to 496 yen after saying it will reduce its fleet expansion plan.

The Baltic Dry Index, a measure of shipping costs for commodities, climbed 1.2 percent yesterday from a 22-year low.

Texas Instruments dropped 2.5 percent to $14.45 in early New York trading. Fourth-quarter profit will fall to as little as 10 cents a share, compared with a previous estimate of at least 30 cents. Sales will be $2.3 billion to $2.5 billion, down from a previous estimate of as much as $3.07 billion.

Earnings Estimates

National Semiconductor, maker of chips for the five largest mobile-phone makers, forecast third-quarter sales that trailed analysts’ estimates. Sony Corp. said it plans to eliminate 16,000 jobs in the largest reduction announced by a Japanese company since the credit crunch drove the world into a recession.

Analysts expect full-year earnings at companies in the Stoxx 600 to fall 13 percent this year, compared with 11 percent growth predicted in January, according to Bloomberg data. Profits in the S&P 500 may drop 9.5 percent on average in 2008.

Q-Cells sank 23 percent to 21.13 euros. The solar company said net income for 2008 will be 185 million euros ($237 million) as weakening demand caused customers to postpone deliveries. That’s down from an earlier prediction of 215 million euros. Sales will amount to 1.225 billion euros, lower than a previous forecast of 1.35 billion euros.

Renewable Energy Corp. ASA, the largest producer of polysilicon used in solar panels, tumbled 11 percent to 59.5 kroner.

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.