By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets rose for a
fifth-straight day on Tuesday after new U.S. Federal Reserve
Chairwoman Janet Yellen said the central bank will stick to the
low-interest rate strategy for now.
The Stoxx Europe 600 index rallied 1.3% to end at 329.52,
closing at the highest level in almost three weeks.
Lagardere SCA jumped 5.3% after the media company said it
expects to post better-than-anticipated profit growth for 2013,
even as sales were dragged lower by a firmer euro.
Shares of Johnson Matthey PLC climbed 3.2% after the chemicals
firm appointed Den Jones, a former executive at BG Group, as
finance director.
On a more downbeat note, shares of Barclays PLC (BCS) dropped
3.8% after the U.K. bank said bonuses rose 10% last year, even as
it posted a drop in underlying profit. It also said it aims to
shrink its balance sheet and to cut up to 12,000 jobs.
Shares of L'Oréal SA declined 3.3% after news that the cosmetics
firm will buy back an 8% stake from Nestle SA (NSRGY). Nestlé
shares lost 0.8%.
Economic news was relatively light in Europe on Tuesday, with
investors instead focusing on Janet Yellen's first testimony before
Congress. The new Fed boss said markets should expect the central
bank to continue to follow the low-interest rate path laid out by
her predecessor Ben Bernanke. She also stressed that the Fed won't
necessarily tighten policy when the unemployment rate drops below
the 6.5% threshold, as it is likely to do within the next few
months.
"I served on the Federal Open Market Committee as we formulated
our current policy strategy and I strongly support that strategy,"
she said.
In line with the Fed's latest policy statement, she said the
bank will continue to taper its asset purchases at future meetings
if the economy improves as expected, although the pullback isn't on
a preset course.
"From her testimony, it is clear that she is very focused on the
weak job market, and remains concerned about the recent weakness in
the data," said Lindsey Piegza, chief economist at Sterne Agee in a
note.
U.S. stocks are higher on Wall Street.
In Europe, Germany's DAX 30 index rallied 2% to 9,478.77. Car
makers helped lift the German benchmark, after BMW AG , up 3%, said
car deliveries rose 7.8% in January. Daimler AG gained 3.7%, and
Volkswagen AG put on 2.6%.
France's CAC 40 index rose 1.1% to 4,283.32, and the U.K.'s FTSE
100 index gained 1.2% to 6,672.66.
Banks generally also helped lift indexes. Shares of BNP Paribas
SA gained 2.3% in Paris, HSBC Holdings PLC (HSBC) rose 1.8% in
London and Deutsche Bank AG (DB) added 1.1% in Frankfurt.
Alcatel-Lucent SA lost 4.4% after Morgan Stanley cut the
telecom-equipment firm to equal weight from overweight, as the
share price moved closer to the target price.
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