By Sarah Jones
April 16 (Bloomberg) -- Stocks in Europe and Asia rose after data on bad loans at American Express Co. and the biggest regional economies in the U.S. suggested the worst of the recession may be over. U.S. futures slipped.
Credit Suisse Group AG and Deutsche Bank AG rose more than 4 percent after growth in bad loans at American Express and the contraction of some U.S. regional economies slowed. Barclays Plc, the U.K.’s third-largest bank, rallied 5.1 percent as President Robert Diamond said better-than-estimated earnings from U.S. banks weren’t a “one-off.” Japans’ JFE Holdings Inc. led steelmakers higher on speculation the nation’s steel mills may secure lower iron-ore prices and as Credit Suisse upgraded global steel stocks to “overweight.”
The MSCI World Index added 0.2 percent at 9:58 a.m. in London. The gauge of 23 developed countries has rebounded 26 percent since March 9 as the biggest U.S. lenders said they made money at the beginning of 2009 and investors speculated the U.S. government’s plan to finance as much as $1 trillion in purchases of illiquid real-estate assets from banks will pull the global economy out of its first recession since World War II.
“Economic data is showing some signs of stabilization,” said Kevin Lilley, a London-based fund manager at Royal London Asset Management which has $63 billion. “The numbers are getting less bad and it is giving some comfort for investors to get involved in the market again.”
European, Asian Stocks
Europe’s Dow Jones Stoxx 600 Index rose for the fourth time in five days, increasing 0.6 percent.
The MSCI Asia Pacific Index climbed for the fifth time in six days, gaining 0.3 percent. The gauge pared an advance of as much as 2.2 percent after a government report showed China’s economy expanded at the slowest pace in almost a decade.
U.S. stocks rallied yesterday as the Federal Reserve said in its regional business survey that the U.S. contraction slowed across several of the biggest regional economies last month, with some industries “stabilizing at a low level.”
“There is a little bit of hope out there,” said David Buik, a London-based market analyst at BGC Partners. “The market is on a slightly better footing and there is now starting to be a general feeling that we may have hit the bottom.”
Futures on the Standard & Poor’s 500 Index slipped 0.6 percent before companies from JPMorgan Chase & Co. to Google Inc. report earnings. Analysts estimate that profits at S&P 500 companies decreased for the seventh straight quarter in the January to March period, the longest stretch of declines since at least the Great Depression. Nokia Oyj, the world’s largest maker of mobile phones, will post results in Europe today.
‘Quite Comforted’
“Expectations are that results are going to be bad but we all know that,” Lilley said. “I am quite comforted that the market is still remaining upbeat in the face of what are potentially bad results.”
Credit Suisse, Switzerland’s second-biggest bank, advanced 4 percent to 38.68 Swiss francs. Deutsche Bank, German’s largest bank, added 4.7 percent to 38.76 euros.
American Express said yesterday that charge-offs for managed consumer accounts rose at a slower pace in March as it sold soured loans to investors.
Barclays climbed 5.1 percent to 206.75 pence. Diamond said earnings from Goldman Sachs Group Inc. and Wells Fargo & Co. weren’t a “one-off” phenomenon.
“You have to look at which banks have improved their competitive position in this period, and in that regard I don’t think it’s a one-off,” Diamond said in an interview yesterday on Bloomberg Television.
Steelmakers
JFE climbed 3.1 percent to 2,700 yen in Tokyo. Nippon Steel Corp., Japan’s largest steelmaker, added 1.3 percent to 313 yen. The country’s steel mills and their suppliers may agree to a cut in iron ore prices of about 30 percent, according to the Sankei newspaper.
ThyssenKrupp AG, Germany’s largest steelmaker, climbed 5.3 percent to 17.37 euros. ArcelorMittal, the world’s largest steelmaker, gained 2 percent to 20.39 euros.
Credit Suisse upgraded the sector to “overweight” from “market weight.”
Roche Holding AG added 1.5 percent to 151.9 francs. The Swiss drugmaker said first-quarter revenue rose 7 percent to 11.6 billion francs ($10.1 billion) as doctors prescribed more of its Avastin and Rituxan treatments. Five analysts surveyed by Bloomberg had a median estimate of 11.5 billion francs. In local currencies, sales climbed 8 percent.
STMicroelectronics NV retreated 2.3 percent to 4.51 euros. Europe’s largest chipmaker said it plans to cut its quarterly dividend 67 percent to 3 cents a share, citing the need to “maintain a solid financial foundation.”
Remy Cointreau
Remy Cointreau SA fell 1.7 percent to 19.45 euros. France’s second-largest liquor company said full-year sales slid 13 percent to 714 million euros ($942 million) after cash-strapped consumers from the U.S. to Russia bought less cognac and champagne. That missed the 780 million-euro median estimate of five analysts surveyed by Bloomberg.
Dassault Systemes SA, whose design software is used by Toyota Motor Corp., declined 3.6 percent to 28.83 euros. Dassault plans to cut its full-year revenue forecast after first-quarter sales fell short of its targets, Chief Financial Officer Thibault de Tersant said on a conference call.
To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.
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