European stocks rose for a second week after companies including Royal Philips Electronics NV and ING Groep NV forecast higher sales or said cost cuts will help earnings to improve.
The Dow Jones Stoxx 50 lost 3.88, or 0.1 percent, to 2,681.03, after rising to a 10-week high yesterday. The benchmark climbed 3.5 percent this week, extending last week's 3.2 percent advance.
Stocks have rallied in the past six weeks as some investors bought shares of companies such as Philips that have taken steps to cut costs in anticipation of an economic recovery next year.
The Stoxx 600 index has gained 17 percent since reaching a 5 1/2-year low on Oct. 9. It rose 0.2 percent Friday.
"The big theme at the moment is company restructuring," said Bob Parker, deputy chairman of Credit Suisse Asset Management, which has US$303 billion under management. Parker cited companies such as Zurich Financial Services AG, which has sold shares and businesses and cut debt. The Swiss insurer's shares have gained 77 percent since tumbling to a record in September.
Parker expects Europe's benchmark indexes to rise about 5 percent between now and the end of the year.
Thirteen of the 17 Western European benchmarks rose today.
France's CAC 40 gained 0.5 percent. Germany's DAX added 0.5 percent, and the UK's FTSE 100 dropped 0.4 percent.
Philips, Europe's largest consumer-electronics maker, added 3.4 percent to 21.30 euros today, bringing its gain this week to 18 percent. The company on Tuesday said its electronics division will have a "good" fourth quarter.
The Amsterdam-based company is cutting spending on factories and equipment by more than half to about 1 billion euros (US$1 billion) this year to preserve profit.
ING, the biggest Dutch financial-services company, gained 0.8 percent to 18.90 euros Friday, for a weekly advance of 14 percent.
The company yesterday said it will eliminate 1,000 jobs at its investment bank, or 5 percent of the unit's workforce, to keep profit growing as slumping stock markets erode fees.
Optimism about higher earnings was constrained today by a report that showed France's economy grew at the weakest pace in almost a year in the third quarter, as companies scaled back investment and reduced inventories.
Gross domestic product, the broadest measure of an economy's performance, rose 0.2 percent in France from the second quarter, when it expanded at twice that pace, the government said.
Carrefour SA dropped 3.7 percent to 44.76 euros. Goldman, Sachs & Co. reduced its recommendation for the French company to "in-line" from "outperform," citing its "rich valuation."
Shares of the world's second-largest retailer change hands at 24 times forecast earnings. That compares with Royal Ahold NV, the world's largest food distributor, which trades at 9.5 times forecast earnings. Tesco Plc, Britain's largest supermarket chain, trades at 14 times estimated earnings.
Fortis, Belgium's biggest financial-services company, fell 4.8 percent to 18.35 euros. The company had a third-quarter loss of 1.7 billion euros, compared with a profit of 532 million euros a year earlier. Tumbling stock prices forced Fortis to write down the value of its investments. Analysts expected a loss of 1.57 billion euros.
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