European stocks fluctuated, following their biggest two-day drop in eight months, as Moody’s Investors Service lowered its credit outlook for Germany.
Elan Corp. tumbled 15 percent after the results of a study for an Alzheimer’s drug failed to show that patients’ symptoms improved. Swatch Group AG (UHR) gained 2.4 percent after posting sales and profit that increased. Man Group Plc (EMG) surged 4.8 percent after saying it will double its cost cuts.
The Stoxx Europe 600 Index (SXXP) rose 0.1 percent to 251.9 at 2:17 p.m. in London after earlier climbing as much as 0.5 percent and dropping as much as 0.3 percent. The gauge slumped 2.5 percent yesterday as concern mounted that Greece will default and more Spanish regions will follow Valencia in seeking a bailout from the country’s central government.
“There should be a kind of correction over yesterday, but the Moody’s news plus the purchasing managers’ index are dragging the markets down,” said Theodore Krintas, managing director of Attica Wealth Management in Athens.
Germany, the Netherlands and Luxembourg had the outlooks for their Aaa credit ratings lowered to negative by Moody’s Investors Service after markets closed yesterday. The ratings company cited the risk that Greece will leave the 17-nation euro currency and the “increasing likelihood” of collective support for European countries such as Spain and Italy, according to a statement.
German manufacturing and services output contracted in July more than economists had forecast. An index based on a survey of purchasing managers in the manufacturing industry declined to 43.3 this month from 45 in June, London-based Markit Economics said in a report. Economists had predicted a reading of 45.1. The measure of Germany’s services industries slipped to 49.7 from 49.9. Economists had projected 50.
A composite index for the euro area’s manufacturing and services industries held at 46.4 in July. That matched the median estimate of economists surveyed by Bloomberg News.
Officials from Greece’s troika of international creditors - - the European Commission, the European Central Bank and the International Monetary Fund -- arrive in Athens today amid doubts that the nation will abide by the commitments needed to obtain continued financial aid.
Elan tumbled 15 percent to 9.44 euros, its biggest slide in almost a year. The company’s experimental Alzheimer’s treatment with Pfizer Inc. and Johnson & Johnson failed to improve symptoms of dementia in the first of four studies of the drug.
STMicroelectronics NV (STM) dropped 5.5 percent to 3.72 euros. Europe’s largest chipmaker forecast third-quarter revenue will grow by about 2.5 percent, indicating sales will miss analysts’ estimates amid weaker demand for the company’s products.
Royal KPN NV (KPN) fell 4.4 percent to 7.01 euros. The Dutch phone company that is partially controlled by Carlos Slim’s America Movil SAB cut its dividend forecast by 61 percent after posting quarterly profit that missed analysts’ estimates.
ProSiebenSat.1 Media AG (PSM), a German broadcaster controlled by KKR & Co. and Permira Advisers LLP, lost 3.1 percent to 16.29 euros, sliding for a third day. The stock was downgraded to equal weight from overweight by Barclays Plc, meaning that investors should not buy more of the company’s shares.
Spanish builder Actividades de Construccion & Servicios SA plunged 5.4 percent to 10.80 euros, dropping for a tenth day. Acciona SA (ANA) and Endesa SA (ELE) tumbled 8.1 percent to 30.90 euros and 5.6 percent to 11.66 euros, respectively.
Gas Natural SDG fell 4.6 percent to 8.48 euros. A gauge of utilities stocks posted the worst performance of the 19 industry groups on the Stoxx 600.
Swatch rose 2.4 percent to 370.40 Swiss francs. The biggest maker of Swiss watches reported first-half profit that beat analysts’ estimates as sales of Omega and Longines timepieces to Chinese consumers increased. Net income rose to 720 million francs ($726 million) from 575 million francs a year earlier, the Biel, Switzerland-based company said.
Man Group rallied 4.8 percent to 72.5 pence. The world’s biggest publicly traded hedge fund manager also said it plans to sell fewer so-called guaranteed products that generate high commissions for employees.
Provident Financial Plc (PFG) jumped 11 percent to 1,300 pence. The U.K.’s biggest subprime lender said first-half net income jumped 20 percent from a year earlier after the number of customers taking out high-interest credit cards increased.
Software AG (SOW) rallied 8.6 percent to 25.41 euros after the company raised the forecast for its Enterprise Transaction Systems in 2012. Germany’s second-biggest software maker also posted a 46 percent increase in revenue from its Business Process Excellence licenses in the second quarter.
Croda International Plc (CRDA) gained 6.8 percent to 2,381 pence. The maker of cosmetic ingredients reported first-half pretax profit before one-off items of 67.5 million pounds ($105 million). That beat the average estimate of 66.2 million pounds in a survey of analysts by Bloomberg.
Societe Television Francaise 1 (TFI) advanced 4.2 percent to 6.59 euros. The stock was raised to overweight from equal weight at Barclays Plc, meaning that investors should buy the shares.
National benchmark indexes in 10 of the 18 western-European markets retreated today. The U.K.’s FTSE 100 Index slid 0.1 percent, while Germany’s DAX Index added 0.2 percent. France’s CAC 40 Index advanced 0.1 percent.
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