Stocks in Europe Gain for Second Day; PPR, Daimler, Yara Climb

By Sarah Jones

Dec. 9 (Bloomberg) -- European stocks rose for a second day as optimism that stimulus plans will boost the global economy lifted retailers and automakers, while investor confidence in Germany unexpectedly improved.

PPR SA, owner of the Gucci luxury-goods brand, and Daimler AG, the world’s second-largest maker of luxury cars, jumped more than 4 percent. Yara International ASA climbed 9.2 percent after the biggest fertilizer maker said it expects strong results this year. Q-Cells SE sank 19 percent as the solar company reduced its profit forecasts for 2008 and 2009.

The Dow Jones Stoxx 600 Index added 1.3 percent to 205.33 as 17 out of 19 industry groups advanced. The measure has rebounded 13 percent since this year’s low Nov. 21 as governments from the U.S. to India announced stimulus plans to buoy the global economy and prevent earnings from tumbling.

“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.

Germany’s ZEW Center for European Economic Research said today 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.

National Markets

National benchmark indexes increased in 15 of the 18 western European markets. The U.K.’s FTSE 100 added 1.9 percent and France’s CAC climbed 1.6 percent. Germany’s DAX rose 1.3 percent as Daimler climbed.

Iceland’s key index tumbled 40 percent after Straumur- Burdaras Investment Bank hf, the only one of Iceland’s four largest banks left standing amid the Atlantic island’s financial crisis, and Exista hf resumed trading.

The Stoxx 600 has retreated 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 12 percent to 40.91 euros. Home Retail Group Plc, owner of Britain’s Argos stores, jumped 5.9 percent to 241 pence. Carrefour SA, Europe’s biggest retailer, added 4 percent to 30.13 euros.

LVMH Moet Hennessy Louis Vuitton SA, the world’s largest maker of luxury goods, jumped 6.6 percent to 48.81 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.

Carmakers

Daimler rose 4.4 percent to 25.67 euros, pacing gains among automakers. Renault SA, France’s second-largest carmaker, increased 2.2 percent to 18.25 euros. Fiat SpA, Italy’s biggest, climbed 4.8 percent to 5.63 euros.

Yara climbed 9.2 percent to 119 kroner. The company said it expects to deliver strong results this year as the economic slowdown forces the company to take measures to counter lower fertilizer sales.

Imperial Energy Plc jumped 18 percent to 1,002 pence after the U.K.-based explorer operating in Siberia confirmed that Oil & Natural Gas Corp. will go ahead with its bid priced at 1,250 pence a share in cash, the same amount it offered in August.

Solar Energy

Q-Cells sank 19 percent to 22.22 euros. The world’s largest maker of solar cells 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.

Renewable Energy Corp. ASA, the biggest producer of polysilicon used in solar panels, tumbled 10 percent to 59.7 kroner.

Infineon Technologies AG, Europe’s second-largest semiconductor maker, declined 11 percent to 79 cents. Texas Instruments Inc. reduced its profit and sales forecasts as the economic slump cut into demand for electronics, while National Semiconductor Corp. predicted third-quarter revenue that trailed analysts’ estimates.

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