By Daniela Silberstein
Feb. 6 (Bloomberg) -- Stocks in Europe and Asia climbed, extending their second straight weekly advance, on optimism that government measures will help revive global growth. U.S. futures advanced after a government jobs report showed the rate of deterioration in the economy is holding steady.
BNP Paribas SA and Mizuho Financial Group Inc. gained more than 2.3 percent as a U.S. Treasury official said details of a financial-recovery plan will be announced in three days. Volvo AB surged 14 percent after saying it would deepen costs cuts and pay a dividend. Infineon Technologies AG and LVMH Moet Hennessy Louis Vuitton SA advanced more than 7.4 percent on results that beat analysts’ estimates.
The MSCI World Index rose for a fourth straight day, adding 0.2 percent to 854.60 at 1:40 p.m. in London. The index of 23 developed nations has gained 1.9 percent this week as results at companies from Vodafone Group Plc to Electrolux AB beat estimates and governments stepped up efforts to ease the financial crisis that the International Monetary Fund predicts will cause global growth to almost grind to a halt this year.
“Capital injections have been insufficient for banks,” Benoit de Broissia, an equity analyst at KBL Richelieu Gestion in Paris, which oversees about $5.1 billion, said in a Bloomberg Television interview. “There’s a need to reduce the assets and risk.”
U.S. Futures, Europe
Standard & Poor’s 500 Index futures added 0.4 percent as the unemployment rate in the U.S. climbed to the highest level since 1992 in January and payrolls tumbled as the recession showed no sign of abating.
Reports today showed U.K. manufacturing production dropped 2.2 percent in December, extended its worst streak of contraction in almost three decades, and personal insolvencies increased in the fourth quarter as the recession deepened. Industrial production in Germany, Europe’s largest economy, dropped the most in at least 18 years in December as demand for plants and machinery faltered.
Europe’s Dow Jones Stoxx 600 Index still added 1.3 percent today as Bayerische Motoren Werke AG climbed, bringing the regional gauge’s weekly advance to 2.9 percent.
The MSCI Asia Pacific Index rose 1.2 percent, extending its weekly gain to 0.5 percent. New stimulus efforts from Japan, Australia and China offset lower forecasts from companies including Mizuho. Toyota Motor Corp. today widened its loss prediction on slowing demand in the U.S. and in Japan.
Geithner, Obama
A U.S. Treasury official yesterday said Secretary Timothy Geithner will make a speech on Feb. 9 and President Barack Obama will hold a news conference that will address a stimulus package. The plan is likely to emphasize guarantees of toxic assets over proposals to create a so-called aggregator bank that would remove them from balance sheets, according to people familiar with the plan.
BNP Paribas, France’s biggest bank, climbed 5.2 percent to 29.13 euros. Mizuho, Japan’s second-largest bank, gained 2.3 percent to 226 yen. Bank of America Corp., the biggest U.S. bank, advanced 4.5 percent to $5.06 in pre-market trading in New York.
Westpac Banking Corp. climbed 3 percent to A$16.50. Australia’s central bank, which has cut its benchmark lending rate by 4 percentage points since September, forecast inflation to slow to 1.75 percent in the 12 months through June.
Volvo, BMW
Volvo surged 14 percent to 39.70 kronor. The world’s second-largest truckmaker aims to pay a dividend of 2 kronor for last year. That contrasts with Swedish companies Electrolux AB and SEB AB which eliminated their 2008 dividends.
Traders in the futures market are betting that European companies will cut their dividends by the most since at least 2001 this year as the global recession batters earnings.
Dow Jones Euro Stoxx 50 Index Dividend Futures that allow investors to speculate on payouts are showing companies will return 33 percent less cash to shareholders than they did in 2008. Analysts estimate a 23 percent reduction, according to data compiled by the Eurex exchange and Bloomberg.
Profits at 73 companies in the Stoxx 600 that reported results in 2009 fell 54 percent, Bloomberg data show. Analysts tracked by Bloomberg estimate that profits will slip 1.6 percent in 2009 after tumbling 20 percent last year.
BMW rose 8.2 percent to 21.20 euros. The world’s largest maker of luxury cars will be posting “clearly positive group earnings” for 2008 after eliminating jobs and selling more Mini and Rolls-Royce models.
Volkswagen, Toyota
Volkswagen AG lost 1.8 percent to 255.37 euros. The region’s largest carmaker said deliveries fell about 20 percent last month as tight credit and a recession sapped demand.
Toyota, the world’s largest carmaker, said its loss this year may be three times earlier estimates as car sales in the U.S. and Japan plunge and a stronger yen erodes earnings.
Toyota, which also lost its top rating from Moody’s Investors Service, said its operating loss in the year ending March may total 450 billion yen ($4.95 billion) compared with the company’s previous estimate of a 150 billion-yen shortfall. The shares slipped 1.8 percent to 3,033 yen in Germany.
U.S. auto-parts suppliers, struggling with losses as sales dwindle, may seek as much as $25.5 billion in government aid to prevent an industry collapse, the Motor & Equipment Manufacturers Association trade group said.
Infineon gained 11 percent to 80.5 cents. Europe’s second- largest chipmaker said its fiscal first-quarter net loss swelled to 404 million euros ($516 million). Analysts had predicted a loss of 547 million euros, the median of six estimates in a Bloomberg survey.
The company targets 600 million euros in annual savings and cut its 2009 budget for investments to preserve cash.
LVMH, Hermes
LVMH added 7.4 percent to 47.68 euros. The largest luxury- goods maker’s earnings before interest and tax beat analysts’ estimates and the company said it will emerge “stronger” from the recession.
Hermes International SCA rose 6 percent to 79.46 euros. The maker of Birkin handbags said it aims to at least maintain sales this year and confirmed plans to open stores and increase production in 2009.
Hexagon AB climbed 22 percent to 35.40 kronor. The world’s biggest maker of measuring instruments said increased demand helped boost full-year profit and it won’t break loan covenants.
Julius Baer Holding AG slid 20 percent to 26.5 Swiss francs for the biggest retreat in the Stoxx 600. Switzerland’s third- biggest wealth manager said second-half profit fell 45 percent as financial market declines eroded portfolios and clients withdrew funds from its asset management unit.
‘Minor Incident’
The shares pared losses of as much as 41 percent after private banking Chief Executive Officer Hans de Gier said an anonymous letter sent to the Swiss banking regulator related to a “minor incident” that was dealt with in October.
“There is an anonymous letter that was sent by somebody” who had a reason to send it, de Gier said at a press conference in Zurich. There was “a minor trading incident we dealt with in October.” He was asked to comment on market speculation that a whistleblower sent a letter to the financial market regulator.
To contact the reporter on this story: Daniela Silberstein in Zurich at dsilberstei2@bloomberg.net.
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