Bloomberg News

Swiss Stocks Rise as Nestle Climbs on Better-Than-Forecast Sales

February 17, 2012

Feb. 16 (Bloomberg) -- Swiss stocks advanced for a second day as U.S. jobless-benefit claims unexpectedly declined to a four-year low and Nestle SA rallied on sales growth that exceeded analysts’ estimates.

Nestle, the world’s biggest food company, climbed to its highest price since 2010. The stock makes up 24 percent of the benchmark Swiss Market Index by weighting. ABB Ltd., the world’s largest maker of power-distribution equipment, retreated 3.6 percent after fourth-quarter profit missed analysts’ estimates.

The SMI, a measure of Switzerland’s biggest and most actively traded companies, added 0.3 percent to 6,217.28 at the close in Zurich, having earlier dropped as much as 0.8 percent. The gauge has rallied 4.7 percent this year as the European Central Bank moved to ease liquidity and U.S. economic reports topped forecasts. The broader Swiss Performance Index rose 0.2 percent today.

“Opportunities in European equities remain attractive, both in more cyclical, as well as less economically sensitive areas,” Luke Stellini, a product director at Invesco Perpetual in Henley-On-Thames, England, said in an e-mail today. His company oversees about $640 billion.

Swiss stocks rebounded today after a U.S. Labor Department report showed that initial claims for jobless benefits unexpectedly dropped last week to 348,000. The median estimate in a Bloomberg survey of economists called for a reading of 365,000. Another release said manufacturing in the Philadelphia region expanded in February at the fastest pace in four months as new orders and sales picked up.

Greek Bailout

The euro area’s creditor countries struggled to reach an agreement over a rescue of Greece, seeking more control over how future aid is spent as the country faces possible default over a bond payment due on March 20.

The finance ministers of the 17 countries using the single currency will decide whether to proceed with the bailout when they meet on Feb. 20, Luxembourg’s Prime Minister, Jean-Claude Juncker, said after chairing a conference call of finance ministers late yesterday.

Nestle added 2.1 percent to 55.60 Swiss francs, its highest price since December 2010 and its biggest gain since September last year. The company reported 2011 sales growth that beat analysts’ estimates and forecast higher 2012 earnings.

“Undoubtedly the biggest, and once again making a strong claim to be the best,” Credit Suisse Group AG analysts wrote in a report today. “Nestle’s organic growth continues to prove the industry’s leading benchmark.”

ABB Shares Drop

ABB sank 3.6 percent to 19.20 francs, the biggest decline since November. Net income rose 19 percent to $830 million, falling short of the $935.9 million average estimate of analysts surveyed by Bloomberg.

Vontobel Holding AG, the Swiss bank and brokerage that specializes in derivatives, slumped 5.3 percent to 25.75 francs, its largest slide since March 2009, after reporting a 23 percent drop in full-year profit.

Adecco SA, the world’s largest supplier of temporary workers, fell 0.9 percent to 46.56 francs as rival Randstad Holding NV reported an unexpected fourth-quarter loss.

Clariant AG dropped 1.8 percent to 12.83 francs after Martin Flueckiger, an analyst at Helvea SA, cut the company’s shares to “accumulate” from “buy.”

--Editors: Alan Soughley, Will Hadfield

To contact the reporters on this story: Corinne Gretler in Zurich at cgretler1@bloomberg.net; Alexis Xydias in London at axydias@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net


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