European Stocks Rise as TNT, FLSmidth Gain; Asian Shares Slip

By Sarah Jones

Nov. 20 (Bloomberg) -- European stocks advanced as the Dow Jones Stoxx 600 Index rebounded from the steepest retreat this month. Asian shares fell after Sony Corp. pushed back its profitability targets.

TNT NV, Europe’s second-largest express-delivery company, and FLSmidth & Co. A/S, the world’s biggest maker of cement kilns, gained on analyst recommendations. Dell Inc., the third- largest maker of personal computers, slid 6.2 percent in German trading after reporting earnings that missed analyst estimates.

Europe’s Stoxx 600 added 0.5 percent to 246.7 at 8:32 a.m. in London, trimming this week’s loss to 0.4 percent. The gauge has surged 56 percent since this year’s low in March, pushing its valuation to more than 53 times reported earnings, near the most expensive level since June 2003.

The MSCI Asia Pacific Index fell for a fourth day, the longest losing streak since July. Standard & Poor’s 500 Index futures were little changed after two days of declines for the benchmark U.S. equities gauge.

Treasury three-month bill rates turned negative yesterday for the first time since last year’s credit freeze, on concern prices of everything from stocks to commodities are too high given the outlook for economic growth.

The global average government bond yield dropped to 2.20 percent as of yesterday from 2.50 percent in August, according to the Merrill Lynch Global Sovereign Broad Market Plus Index. Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., said the “systemic risk” of new asset bubbles is rising as the Federal Reserve keeps interest rates at record lows.

Dell Drops

Dell sank 6.2 percent to $14.89 in Germany. The company reported yesterday a 54 percent drop in third-quarter net income to $337 million, or 17 cents a share, as sales slid 15 percent to $12.9 billion. Analysts on average predicted profit of 27 cents and sales of $13.1 billion.

TNT increased 2.4 percent to 2.38 euros after UBS AG upgraded the shares to “buy’ ‘from “neutral.”

FLSmidth jumped 5.1 percent to 339 kroner, the biggest gain on the Stoxx 600, as Goldman Sachs Group Inc. raised the company to “buy” from “neutral.”

Cable & Wireless Plc advanced 2.9 percent to 139.5 pence. The U.K.’s second-largest fixed-line phone company was raised to “overweight” from “neutral” at JPMorgan Chase & Co., which cited its “above-average exposure to economic recovery.”

Sony Slides

Sony slid 2.4 percent to 2,410 yen in Tokyo. The maker of the PlayStation 3 game machine said yesterday that it’s aiming for a 10 percent return on equity by March 2013, which is later than its previous target of March 2011.

TUI Travel Plc dropped 2 percent to 250.2 pence and Thomas Cook Group Plc fell 3.3 percent to 211.4 pence as Morgan Stanley lowered its recommendations for Europe’s two largest tour operators, citing “a weaker operating environment and more expensive debt refinancing.”

TUI Travel was downgraded to “equal weight” from “overweight” and Thomas Cook was cut to “underweight” from “equal weight.”

To contact the reporter on this story: Sarah Jones in London at sjones35@bloomberg.net.