European stocks climbed for a third day, extending the Stoxx Europe 600 Index’s highest level since July, as U.S. jobs and manufacturing data added to optimism the recovery in the world’s largest economy is gaining momentum.
Hennes & Mauritz AB advanced 2.4 percent after Europe’s second-largest clothing retailer reported an unexpected gain in sales. Aixtron SE surged 15 percent as Deutsche Bank AG recommended the shares. Pernod-Ricard (RI) SA slid 2.1 percent as Groupe Bruxelles Lambert SA sold a 499 million-euro ($651 million) stake.
The Stoxx 600 (SXXP)rose 0.3 percent to 270.98 at the close of trading, after swinging between gains and losses at least 20 times today. The gauge has surged 11 percent this year amid optimism that the euro area will contain its sovereign-debt crisis and as U.S. economic data topped forecasts. The rally has pushed the index’s valuation to 11.3 times estimated earnings, the most expensive since May, Bloomberg data shows.
“We’re getting some positive economic news from the U.S.,” said Mike Lenhoff, chief strategist at Brewin Dolphin Securities Ltd. “Markets have come a long way in a short space of time and the scope to move considerably further upwards at this point in time is very limited.”
National benchmark indexes rose in 14 of the 18 western European markets. Germany’s DAX added 0.9 percent and France’s CAC 40 climbed 0.4 percent. The U.K.’s FTSE 100 declined 0.1 percent as Fitch Ratings said Britain risks losing its top credit grade.
The volume of shares changing hands on the Euro Stoxx 50 Index (SX5E) was 29 percent above the average over the past 30 days, according to data compiled by Bloomberg.
The number of Americans applying for jobless benefits fell by 14,000 to 351,000 in the week ended March 10, Labor Department figures showed today. Economists had forecast 357,000, according to the median estimate in a Bloomberg News survey. Claims reached the same level a month ago, the lowest since March 2008.
Manufacturing in the New York region expanded in March at the fastest pace since June 2010, while Philadelphia factory output grew the most in almost a year.
Gains in Europe were limited today as Fitch said Britain risks losing its top investment grade because of its limited ability to deal with shocks.
U.K. Debt Rating
The rating company changed the outlook on the U.K. to “negative” from “stable,” indicating a “slightly greater” than 50 percent chance that the AAA-rating will be reduced within two years. It cited the weak economic recovery, high debt levels and threats from Europe’s fiscal crisis.
H&M (HMB) added 2.4 percent to 249.60 kronor after comparable sales advanced 2 percent in February from a year earlier. Same- store sales were expected to drop 1 percent, according to an SME Direkt poll of analysts.
Aixtron rallied 15 percent to 14.40 euros, the biggest gain since October 2008, as Deutsche Bank upgraded the maker of equipment for the semiconductor and lighting-technology industries to buy.
HeidelbergCement AG (HEI) climbed 5.1 percent to 44.57 euros. The world’s third-largest maker of cement predicted operating profit and sales will rise this year on growth in Asia and Africa and a weaker increase in raw material and energy costs. Net income in 2011 increased 4.5 percent to 534 million euros.
Intesa Sanpaolo SA rose 4 percent to 1.56 euros after Italy’s second-biggest bank reported fourth-quarter operating profit that exceeded estimates. The company posted a net loss of 10.1 billion euros for the period after writing down goodwill related to mergers and acquisitions.
Vestas Wind Systems A/S (VWS) jumped 5.5 percent to 61.10 kroner in Copenhagen after Les Echos reported that Alstom SA is looking at the Danish company, among others, to increase its wind business. The newspaper cited unidentified people. Alstom Chief Executive Officer Patrick Kron said today he will not sell shares in the current economic climate to finance “adventurous deals.”
K+S AG (SDF), Europe’s largest potash producer, soared 7.2 percent to 39.16 euros after the company reduced its full-year earnings outlook less than expected. Profit will fall “moderately” this year before recovering in 2013, K+S said.
“The guidance downgrade was less than feared,” Wolfgang Fickus, an analyst at WestLB AG, who recommends buying the shares, said in a note to clients.
Zodiac Aerospace (ZC) gained 4.8 percent to 79.13 euros after saying first-half sales rose to 1.57 billion euros, compared with analysts’ estimates of 1.56 billion euros.
Pernod-Ricard paced declining shares, falling 2.1 percent to 80.38 euros after Groupe Bruxelles Lambert sold 6.2 million shares for 80.60 euros each.
Hikma Pharmaceuticals (HIK) Plc lost 4.3 percent to 740.5 pence after JPMorgan Chase & Co. cut the seller of generic and branded drugs to neutral, the equivalent of hold, from overweight.
Coloplast A/S (COLOB), the world’s largest maker of ostomy and urology products, slid 2.4 percent to 909 kroner in Copenhagen as UBS AG cut the shares to sell from neutral.
Bwin.Party Digital Entertainment Plc retreated 5 percent to 153 pence after Macquarie Group Ltd. downgraded the stock to underperform, the equivalent of sell, from neutral.
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