By Sara Sjolin, MarketWatch
ARM Holdings climbs after earnings report
European stock markets pared sharp gains on Tuesday after German
economic sentiment fell for the first time in six months, and as
investors monitored Greece's struggle with getting access to its
next portion of bailout money.
The Stoxx Europe 600 index climbed 0.5% to 408.75, but had
traded as high as 412.11 earlier in the day. On Monday, the
pan-European benchmark jumped 0.8%, boosted by China's move to
stimulate its economy and with market participants largely ignoring
concerns about Greece's slow progress in renegotiating a reform
program with its lenders.
Greek woes: Greece needs to agree on a range of economic
overhauls with the lenders in order to receive the next much-needed
tranche of bailout and avoid running out of cash. On Monday, Athens
ordered public entities including state-owned companies and public
pension funds to transfer cash reserves to the central bank
(http://www.marketwatch.com/story/greece-orders-public-bodies-to-transfer-cash-to-central-bank-2015-04-20),
a move that comes as Greece scrambles to find money it needs to
service debt.
And on Tuesday, Bloomberg reported that the European Central
Bank is looking at measures to rein in support
(http://www.marketwatch.com/story/ecb-looking-at-reining-in-support-for-greek-banks-reports-2015-04-21)
for Greek banks under its emergency liquidity assistance, known as
the ELA. The measures include a proposal to raise the haircuts
banks take on the collateral when they borrow from the Bank of
Greece.
The Eurogroup of eurozone finance ministers meets on Friday to
discuss the Greek bailout, but few expect a major breakthrough in
talks. A top EU official has given Greece a deadline of the
Eurogroup meeting on May 11
(http://www.marketwatch.com/story/top-eu-official-to-greece-agree-to-reform-by-may-11-or-else-2015-04-17)
to agree on a reform plan or potentially face a default.
"All noises ahead of the meeting suggest there are problems
coming to an agreement and all the while Greek bond yields continue
to rise. This shows there is stress in the [financial] system and
concerns in the bond market," said Richard Perry, market analyst at
Hantec Markets.
The yield on 10-year Greek government bonds climbed 26 basis
points on Tuesday to 13.32%, according to electronic trading
platform Tradeweb. That's the highest in more than two years.
Greece's Athex Composite index lost 2.8% to 708.81 on
Tuesday.
Other markets: Germany's DAX 30 index rose 1% to 12,005.16,
coming off its intraday high after the ZEW indicator of German
economic sentiment dropped in April
(http://www.marketwatch.com/story/zew-german-economic-sentiment-drops-unexpectedly-2015-04-21),
marking the first decline in six months. The index dropped to 53.3
from 54.8 in March.
However, when assessing the current situation the survey
respondents were much more optimistic: the corresponding indicator
leapt to 70.2 in April from 55.1 in March.
"Germany is doing fine. In fact, it may now be doing so well
that some observers believe it can't get much better. That seems to
be the message from German ZEW investor confidence," Holger
Schmieding, chief economist at Berenberg, wrote in a note.
France's CAC 40 index gained 0.2% to 5,199.27, while the U.K.'s
FTSE 100 index was flat at 7,052.23
(http://www.marketwatch.com/storyno-meta-for-guid).
Earnings: Shares of ARM Holdings PLC (ARMHY) jumped 4.6% after
the chip designer reported a 36% rise in first-quarter net profit
(http://www.marketwatch.com/story/arms-profit-lifted-by-strong-smartphone-demand-2015-04-21).
SAP SE put on 3% after the software company reported a 22% rise
in first-quarter revenue
(http://www.marketwatch.com/story/sap-profit-down-23-after-cloud-move-2015-04-21)
(http://www.marketwatch.com/story/sap-profit-down-23-after-cloud-move-2015-04-21)
and a 23% fall in profit.
Shares of Actelion Ltd. rose 4.5%. The Swiss biotech firm
reported a 25% increase in first-quarter profit and raised
full-year core-earnings guidance
(http://www.marketwatch.com/story/actelion-lifts-full-year-guidance-as-profit-up-25-2015-04-21).
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