European, Asian Stocks Rise, Extend Weekly Rally; Sandvik Gains

By Adria Cimino

July 17 (Bloomberg) -- Stocks in Europe and Asia advanced, extending the MSCI World Index’s biggest weekly rally since March, after economist Nouriel Roubini said the worst of the financial crisis is over. U.S. futures fell.

Sandvik AB, the world’s largest maker of metal-cutting tools, surged 6.6 percent in Stockholm after reporting an operating loss that was smaller than the company predicted last month. Novartis AG, Europe’s second-largest drugmaker, climbed 1.1 percent after JPMorgan Chase & Co. recommended the shares.

The MSCI World added 0.2 percent at 8:20 a.m. in London. The gauge of 23 developed nations has climbed 6.6 percent this week, after companies from Goldman Sachs Group Inc. to Johnson & Johnson reported earnings that beat analysts’ estimates.

Europe’s Dow Jones Stoxx 600 Index increased 0.3 percent, bringing its weekly advance to 6.7 percent, the steepest since November. The MSCI Asia Pacific Index climbed 0.6 percent, extending its advance since July 10 to 2.6 percent.

Futures on the Standard & Poor’s 500 Index slid 0.4 percent, indicating the benchmark index for U.S. equities may trim its weekly rally of 7 percent. CIT Group Inc., the 101- year-old commercial finance company facing bankruptcy after failing to receive federal guarantees for its bonds, said it’s in talks with potential lenders to secure funding.

CIT, Indonesia Bombing

CIT is running short of cash, and may need as much as $6 billion to avoid filing for bankruptcy protection after the U.S. wouldn’t give the firm a second bailout, according to CreditSights Inc.

Gains in equities were also limited after explosions rocked two Jakarta hotels in Indonesia’s worst terrorist attack since 2005. Bombs tore through the Ritz Carlton and JW Marriott hotels in the Indonesian capital today, killing at least nine people and injuring 42 others.

The worst U.S. recession in at least five decades may be over at year’s end, Roubini, the New York University economist who predicted the financial crisis, said at a conference in New York yesterday. His comments helped send U.S. stocks higher for a fourth day, with the S&P 500 erasing a 0.6 percent drop.

Roubini in a statement later said that his comments on the recession ending by year-end were consistent with views he had expressed previously.

Sandvik added 6.6 percent to 64.25 kronor. The company posted a second-quarter operating loss of 2 billion kronor ($260 million) on falling orders and one-time costs.

Novartis, Carrefour

Novartis advanced 1.1 percent to 45.54 Swiss francs. The drugmaker was raised to “overweight” from “neutral” at JPMorgan.

Carrefour SA slipped 1.7 percent to 32.05 euros. Europe’s biggest retailer reported a second straight drop in quarterly sales as French and Spanish shoppers trimmed their budgets. Revenue fell 1.2 percent to 23.44 billion euros ($33.1 billion).

International Business Machines Corp. advanced 1.2 percent to $111.99 in Germany. The world’s biggest computer-services provider topped estimates for second-quarter earnings and raised its full-year forecast.

IBM was the second U.S. technology bellwether this week to post forecasts that beat estimates, following Intel Corp. on July 14, indicating they are coping with the worst economic slump in five decades. Still, Google Inc. tempered the outlook for the technology industry by reporting slowing sales in the second quarter last night. Google fell 4 percent to $424.70.

Bank of America Corp., Citigroup Inc. and General Electric Co. are scheduled to report results today.

To contact the reporter on this story: Adria Cimino in Paris at acimino1@bloomberg.net.