By Sarah Jones
June 9 (Bloomberg) -- European stocks advanced after Texas Instruments Inc. increased its second-quarter forecasts and Nobel Prize-winning economist Paul Krugman predicted the U.S. recession will end by September.
ARM Holdings Plc and Nokia Oyj rose more than 3 percent as Texas Instruments, whose earnings are a barometer of demand for a wide variety of electronics, projected revenue and profit that beat analysts’ estimates. Texas Instruments increased 4.3 percent in Germany. Barclays Plc added 1.4 percent after a person with knowledge of the negotiations said BlackRock Inc. may buy the bank’s fund business for as much as $13 billion. Porsche SE climbed 2 percent as the carmaker confirmed it’s in talks with Qatar on an investment.
Europe’s Dow Jones Stoxx 600 Index added 1.1 percent at 8:12 a.m. in London. The gauge has rebounded 34 percent since March 9 on speculation that the worst of the first global recession since World War II is over. The measure is valued at 24.9 times the earnings of its companies, the most expensive level since 2004, weekly data compiled by Bloomberg show.
“Though it was widely expected that Texas Instruments will raise its guidance, we are positively surprised by new guidance” for the second quarter of 2009, London-based Credit Suisse analyst Adrien Bommelaer wrote in a note. “Therefore, we expect other companies to also beat their initial guidance when they report.”
‘We’re Stabilizing’
U.S. stocks staged a late day rally to end little changed yesterday after Krugman said in a speech to the London School of Economics that “there’s some reason to think that we’re stabilizing.”
“I would not be surprised if the official end of the U.S. recession ends up being, in retrospect, dated sometime this summer,” he said in the lecture. “Things seem to be getting worse more slowly.”
Futures on the Standard & Poor’s 500 Index added 0.3 percent today. The U.S. Treasury is preparing to announce it will let 10 banks including JPMorgan Chase & Co. buy back government shares, according to people familiar with the matter.
In Asia, the MSCI Asia Pacific Index fell 0.6 percent on concern share prices have outstripped the prospects for corporate earnings after a three-month rally.
Texas Instruments
ARM Holdings, the U.K. chip designer whose products are used in video-game consoles, cameras, home appliances and Apple Inc.’s iPhones, added 3 percent to 111 pence. Nokia, the world’s biggest maker of mobile phones, gained 3.7 percent to 11.28 euros. Texas Instruments climbed 4.3 percent to $20.62.
Texas Instruments’ profit will be 14 cents to 22 cents a share on sales of $2.3 billion to $2.5 billion. Analysts projected profit of 10 cents a share on sales of $2.21 billion, according to a Bloomberg survey.
Barclays added 1.4 percent to 287.75 pence after a person with knowledge of the negotiations said BlackRock may buy the Barclays Global Investors unit for $12 billion to $13 billion in cash and stock.
BlackRock, which may announce the deal as soon as tomorrow, would pay half the purchase price in cash and the rest in stock leaving the London-based lender with a 20 percent stake in the combined company.
Porsche gained 2 percent to 47.95 euros. The company is in negotiations with Qatar about a potential investment in the sports-car maker, Porsche spokesman Albrecht Bamler said in a telephone interview. Bamler declined to say when a deal might be reached. He said the atmosphere of the talks is “good.”
Heidelberger Druckmaschinen AG retreated 1.8 percent to 4.98 euros as the world’s largest maker of printing presses said it expects a drop in sales and earnings for the first quarter of 2010. The company also said it expects to get state aid to help survive a slump in equipment orders and losses this year.
To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.
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