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Friday, October 16, 2009

European Stocks, U.S. Futures Advance; Shares in Asia Decline

European stocks climbed and U.S. index futures gained as higher oil lifted the earnings outlook for energy producers and Google Inc. reported profit that beat analysts’ estimates. Asian shares retreated.

Repsol YPF SA added 2.1 percent as Spain’s biggest oil company discovered the presence of crude in a natural gas well offshore Venezuela and oil jumped to a one-year high in New York. Lloyds Banking Group Plc rose 3.9 percent after Deutsche Bank AG recommended the U.K.’s largest mortgage lender.

Europe’s Dow Jones Stoxx 600 Index climbed 0.6 percent to 248.83 at 8:16 a.m. in London, extending a one-year high and bringing its weekly advance to 2.6 percent.

The regional gauge has gained 58 percent since March 9 as companies from Royal Philips Electronics NV to JPMorgan Chase & Co. reported earnings that exceeded estimates. The rally has pushed valuations on the index to 49.5 times earnings, near the most expensive level since 2003, Bloomberg data show.

Futures on the Standard & Poor’s 500 Index climbed 0.3 percent as Google reported sales that beat estimates after the recovering economy boosted demand for online ads and e-commerce.

Gains in U.S. futures were limited as International Business Machines Corp. reported a decline in contract signings and Advanced Micro Devices Inc. posted its 12th straight loss. Bank of America Corp. and General Electric Co. are scheduled to announce results today.

The MSCI Asia Pacific Index slid 0.7 percent as LG Display Co., the world’s second-largest maker of liquid-crystal displays, reported earnings that missed analysts’ projections and forecast that product prices will fall.

Repsol, BP

Repsol added 2.1 percent to 19.14 euros after the company said tests on the natural gas revealed the presence of crude oil, which the Venezuelan government said may help speed the development of the field. The Cardon IV field ranks as Venezuela’s largest gas discovery and one of the world’s five biggest finds in 2009, Repsol said.

BP Plc, Europe’s second-largest oil company, gained 1.1 percent to 561.50 pence, while Total SA, Europe’s third-biggest, increased 1.7 percent to 42.57 euros.

Crude oil rose above $78 a barrel in New York, capping its biggest weekly gain in two months, on an unexpected decline in U.S. gasoline stockpiles and refinery utilization.

Lloyds advanced 3.9 percent to 95.01 pence. Deutsche Bank raised the mortgage lender to “buy” from “hold,” citing the shares’ valuation. Analyst Jason Napier boosted his price estimate to 115 pence from 100 pence in a note to investors.

Carrefour, National Express

Carrefour slipped 0.9 percent to 30.90 euros. The retailer reported a 2.9 percent decline in third-quarter sales to 24.02 billion euros ($35.9 billion) and said operating profit will be “at the lower end” of the company’s 2.7 billion-to-2.8 billion euro range. Carrefour also dismissed the head of its French superstores, Alain Souillard, and said it will leave Russia.

National Express Group Plc tumbled 30 percent to 330.9 pence after CVC Capital Partners Ltd. decided not to make an offer for the U.K. bus and rail company. National Express said a stock sale is now “the most appropriate course of action.”

Industrial production in the U.S. probably rose in September for a third consecutive month, putting manufacturing at the forefront of the emerging economic recovery, economists said before a report today.

Output at factories, mines and utilities climbed 0.2 percent following increases of 0.8 percent and 1 percent respectively in August and July, according to the median forecast of 77 economists surveyed by Bloomberg News. Another report may show consumer sentiment this month slipped from the highest level in more than a year.

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