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Electronics and chips give European stocks a boost

European stocks gained a second week, led by Nokia Oyj and Royal Philips Electronics NV, on optimism economic expansion in the US will boost sales and earnings at companies that do much of their business there.

The Dow Jones Stoxx 50 Index increased 4.95, or 0.2 percent, to 2531.15 for a weekly gain of 1.4 percent. It's at its highest since Dec. 16. The Stoxx 600 increased 0.3 percent to 218.15, also an eight-month high. It's climbed for 11 out of 12 days, adding 2.2 percent since last Friday.

Companies including Nokia, Philips and Siemens AG, with sales in the US, led the Stoxx 50's gains this week, a sign investors are seeking businesses that will benefit most from increased demand in Europe's largest export market. Economic reports on US jobs, housing starts and industrial production boosted optimism among some investors that growth in the country is accelerating.

"Investors want to believe in a rebound," said Marc Renaud, a fund manager at CCR Actions, which oversees US$1.4 billion in Paris.

Shares of Infineon Technologies AG, ASML Holding NV and ASM International NV jumped after Intel Corp, the world's biggest computer-chip maker, increased its third-quarter sales forecast and said its gross margin, or the portion of sales remaining after production costs are subtracted, will widen.

Germany's DAX, the UK's FTSE 100 and France's CAC 40 all touched their highest levels in at least nine months during the week. Today, benchmark indexes rose in 10 of the 17 Western European markets. The DAX fell 0.5 percent, trimming its one-week advance to 3.1 percent. The FTSE 100 climbed 0.1 percent, dropping 0.5 percent for the week. The CAC advanced 0.7 percent, for a five-day gain of 1.5 percent.

September futures on the Dow Jones Euro Stoxx 50 Index of companies based in the 12 countries sharing the euro fell 0.1 percent to 2590. The index increased 0.4 percent to 2593.55.

Philips, Europe's largest consumer-electronics maker, added 4.3 percent to 21.41 euros today, bringing its weekly gain to 9.3 percent. The company makes about 30 percent of sales in the US.

"All multinationals will benefit from an environment of US growth," said Michael Hughes, chief investment officer at Baring Asset Management in London, where he oversees the equivalent of US$32 billion.

Nokia, the world's largest maker of mobile phones, climbed 10 percent this week, leading gains on the Stoxx 50. The shares rose 1.5 percent to 14.35 euros today. Nokia made about 16 percent of total revenue in the US last year.

Siemens, Germany's biggest engineering company, added 1 percent to 56.64 euros today, for a weekly gain of 7.9 percent.

It makes about a quarter of its revenue in the US

Semiconductor-related stocks surged after Intel increased its sales forecast to between US$7.3 billion and US$7.8 billion from a previous forecast of US$6.9 billion to US$7.5 billion.

STMicroelectronics NV, Europe's biggest maker of semiconductors, gained 4.2 percent to 21.52 euros today. Infineon Technologies AG, Europe's second-largest, advanced 4.5 percent to 13.05 euros.

ASML Holding, the world's largest maker of machines used to etch circuits on semiconductors, jumped 6.1 percent to 14.03 euros. ASM International, a rival, gained 6.2 percent to 17.05 euros. Technology companies led gains among the Stoxx 600's 18 industry groups this week.
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