EUROPE MARKETS: European Stocks Set For Best Week Since 2016, Alongside Wall Street's Recovery
February 16 2018 - 7:43AM
Dow Jones News
By Carla Mozee, MarketWatch
European stocks headed firmly higher Friday, with ongoing
recovery on Wall Street contributing to gains that are guiding the
continental market toward its best weekly win in more than a
year.
How markets are moving
The Stoxx Europe 600 index leapt 0.8% to 379.47, on course for a
third straight gain. All sectors rose, led by utility and telecom
shares. On Thursday, the index rose 0.5%
(http://www.marketwatch.com/story/european-stocks-charge-higher-as-airbus-commodity-shares-advance-2018-02-15).
Spain's IBEX 35 charged up 1.1% to 9,817.10, and Germany's DAX
30 index tacked on 0.5% at 12,402.15.
France's CAC 40 index put on 0.9% at 5,268.33, and the U.K.'s
FTSE 100 bulked up by 0.6% to 7,280.05.
The euro bought $1.2474, turning lower intraday. The shared
currency fetched $1.2507 late Thursday in New York.
In the fixed-income market, the yield on the 10-year German bund
slipped 2 basis points to 0.737%, according to Tradeweb. Yields
fall when prices rise.
Check out:Here's why the U.S. dollar isn't getting much love
(http://www.marketwatch.com/story/heres-why-the-us-dollar-is-nobodys-valentine-2018-02-14)
What's driving the market
The Stoxx 600 was headed toward a weekly gain of 3%, which would
be the best week since December 2016 and the first advance after
three weeks of losses, according to FactSet.
The market appeared to key off moves on Wall Street, as U.S.
stocks on Thursday shrugged off intraday losses to finish higher
for a fifth straight session
(http://www.marketwatch.com/story/dow-on-pace-for-5th-win-in-a-row-helped-by-ciscos-earnings-driven-jump-2018-02-15)
leaving the Dow Jones Industrial Average back above 25,000.
The recent global selloff in equities is seen as prompted partly
by a rise in U.S. bond yields amid signs of an uptick in inflation.
But after the release this week of stronger-than-expected U.S.
inflation data
(http://www.marketwatch.com/story/cpi-surges-05-in-january-but-yearly-rate-of-inflation-unchanged-2018-02-14),
investors have been snapping up battered stocks.
Read:This market selloff was overdue, but now it looks overdone,
strategists say
(http://www.marketwatch.com/story/this-market-selloff-was-overdue-but-now-it-looks-overdone-strategists-say-2018-02-10)
What strategists are saying
"Europe has jumped higher out of the blocks on the last trading
data of the week. The encouraging start comes following yet another
impressive finish on Wall Street," said City Index market analyst
Fiona Cincotta, in a note.
"This indicates that the market has quickly adjusted to the
prospect of higher future inflation and a more hawkish Fed. Let's
not forget, the backdrop hasn't changed, earnings remain strong and
company outlook's encouraging," she said.
Stock movers
Royal Vopak NV (VPK.AE) rallied 16%
(http://www.marketwatch.com/story/royal-vopak-posts-net-loss-adjusted-earnings-rise-2018-02-16)
after the company, which stores chemicals, oil and other
resource-related products, posted an increase in fourth-quarter
adjusted net profit excluding exceptional items to EUR76.2 million,
but it swung to a net loss.
Vivendi SA (VIV.FR) slid 7.4% even as the French music and media
company said late Thursday fourth-quarter net profit increased more
than tenfold, to 828 million euros ($1.03 billion)
(http://www.marketwatch.com/story/vivendi-net-profit-jumps-tenfold-in-4th-quarter-2018-02-16).
"While the lack of guide [from Vivendi] may disappoint some
investors, we believe the stock has already been heavily penalised
in recent weeks partly owing to concerns over the 2018 guidance,"
said Goldman Sachs in a research note Friday.
Electricite de France SA, or EDF, (EDF.FR) climbed 6.4% after
the French utility posted a rise in yearly net profit to 3.17
billion euros ($3.98 billion)
(http://www.marketwatch.com/story/edf-2017-profit-rises-but-uk-earnings-slide-33-2018-02-16)
while a decline in sales wasn't as much as analysts had
anticipated.
Saab AB shares (SAAB-B.SK) dumped 8.8% of their value after the
Swedish defense company reported weaker-than-expected earnings of
517 million Swedish kronor
(http://www.marketwatch.com/story/saab-shares-slump-after-earnings-miss-2018-02-16-34855727)
($65 million) for the fourth quarter, on lower orders in its
Dynamics unit, which sells ground combat weapons, among other
items.
Segro PLC shares (SGRO.LN) jumped 6% after the
property-investment company raised its dividend by 6.1%
(http://www.marketwatch.com/story/segro-2017-profit-more-than-doubles-2018-02-16-24853926),
and said pretax profit for 2017 more than doubled to GBP976.3
million.
Economic data
U.K. retail sales increased just 0.1% on the month
(http://www.marketwatch.com/story/uk-retail-sales-growth-slows-more-than-expected-2018-02-16)
in January, the Office for National Statistics said, missing
expectations of 0.6% in a Wall Street Journal survey of analysts.
Sales rose 1.6% year-over-year, lower than the 2.4% rate in the
year-ago period.
(END) Dow Jones Newswires
February 16, 2018 07:28 ET (12:28 GMT)
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