By Daniela Silberstein
Feb. 3 (Bloomberg) -- European stocks climbed as better- than-estimated results from Vodafone Group Plc and Merck & Co. lifted telecommunications and health-care shares, overshadowing BP Plc’s first quarterly loss in seven years.
Vodafone, the world’s largest mobile-phone company, added 7.1 percent after third-quarter sales climbed 14 percent on a weaker pound and higher revenue in India. BP, Europe’s second- biggest oil company, sank 1.7 percent after reporting a $3.3 billion loss.
The Dow Jones Stoxx 600 Index added 0.9 percent to 188.02 at 2:18 p.m., rebounding from its biggest loss in two weeks. The regional measure traded at 9 times the earnings of its companies last month, the second-cheapest level since at least 2002, monthly data compiled by Bloomberg show.
“The valuations in the market are relatively attractive if you look at equities,” said Lucy MacDonald, London-based chief investment officer of global equities at RCM UK Ltd., which has about $100 billion under management. “However, the growth environment is still very challenging.”
The Stoxx 600 has dropped 5.2 percent in 2009 as earnings at the 141 companies in western Europe that have posted results this reporting season shrank 40 percent on average, Bloomberg data show. Analysts project a 1.6 percent drop in profits for companies in the Stoxx 600 this year following a 20 percent slump in 2008, the data indicate.
National benchmark indexes rose in all 18 western European markets except Luxembourg, Finland and Ireland. Germany’s DAX and the U.K.’s FTSE 100 gained 0.9 percent. France’s CAC 40 added 0.7 percent.
Global Economy
Global growth will almost grind to a halt this year, the International Monetary Fund said last week. South Korea’s finance ministry said today the IMF expects the country’s economy to contract this year for the first time in 10 years.
A report today may show the number of Americans signing contracts to buy previously owned homes held at a record low. The U.S. housing market lost $3.3 trillion in value last year and almost one in six owners with mortgages owed more than their homes were worth as the economy went into recession, according to Zillow.com, a Seattle-based real estate data service.
Vodafone climbed 7.1 percent to 137.25 pence. Sales in the three months ended Dec. 31 rose to 10.47 billion pounds ($14.9 billion) from 9.16 billion pounds a year earlier. The average estimate of six analysts surveyed by Bloomberg was for 10.29 billion pounds.
Telecom Italia SpA, Italy’s biggest phone company, surged 5 percent to 1 euro. Deutsche Telekom AG, Europe’s largest, advanced 3.8 percent to 9.88 euros.
Novartis AG, Switzerland’s second-largest drugmaker, added 2.1 percent to 48.46 francs as Merck reported a profit of $1.64 billion, after a loss a year earlier. Savings from firing workers and closing plants offset sales declines for the bone- strengthening drug Fosamax.
BP slid 1.7 percent to 476.5 pence. Excluding one-time items and gains or losses from inventories, the company’s earnings missed analysts’ estimates as the global recession spurred a record plunge in crude prices.
To contact the reporter on this story: Daniela Silberstein in Zurich at dsilberstei2@bloomberg.net.
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