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Sun, Feb 15, 2009 - Page 10 News List

Stocks in Europe trim weekly decline

BLOOMBERG

Stocks in Europe climbed for the first time in four days, as profits at Pernod Ricard SA beat analysts’ estimates and the first advance in oil this week lifted energy shares.

Pernod, the world’s second-largest liquor company, rose the most this year. StatoilHydro ASA, Norway’s largest oil and gas company, increased 3.5 percent.

The Dow Jones STOXX 600 Index gained 0.3 percent to 191.27. The regional gauge pared an increase of as much as 2.3 percent after Lloyds Banking Group PLC said it expects HBOS PLC to report a bigger-than-expected loss for last year, sending financial shares lower.

Investors have focused on companies’ earnings to asses the impact of the first simultaneous recessions in Europe, the US and Japan since World War II. The STOXX 600 dropped 3.7 percent this week as companies from Electricite de France SA to Diageo PLC posted disappointing results.

“The market will remain volatile, without a real trend, as we wait for improvements in the economy,” said Arielle Levi, a fund manager at CCR Actions in Paris. “There’s still a significant risk for banks.”

Groupe CCR oversees US$15.9 billion.

Profits have declined 65 percent for 599 companies in western Europe that have released earnings since Jan. 12, data compiled by Bloomberg show. Europe’s economy contracted 1.5 percent in the fourth quarter from the previous three months, the most in at least 13 years, compounding pressure on the European Central Bank to reduce interest rates next month.

National benchmark indexes gained in 12 of the 18 western European markets. The UK’s FTSE 100 slipped 0.3 percent. France’s CAC 40 gained 1.1 percent and Germany’s DAX added 0.1 percent.

Pernod jumped 6 percent to 48.85 euros. The company said first-half profit excluding acquisitions rose to 685 million euros (US$883.5 million), topping the median estimate. UBS AG analysts reiterated a “buy” recommendation after Pernod’s statement, citing an improved outlook for the company’s profit margins and benefits from lower interest rates.

StatoilHydro rose 3.5 percent to 123.7 kroner. Total SA, Europe’s third-largest oil company, advanced 1.5 percent to 40.90 euros.

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