By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets rose for a ninth
straight day on Tuesday after a soft jobs report from the U.S.
stoked expectations the Federal Reserve will maintain its
aggressive easing program well into 2014.
The Stoxx Europe 600 index traded 0.5% higher at 321.08, putting
it on track for the highest close since 2008.
U.S. data showed 148,000 jobs were added to the economy in
September, below the 185,000 expected by economists polled by
MarketWatch. The jobless rate unexpectedly fell to 7.2% from 7.3%
in August. The report was delayed due to the U.S. government
shutdown.
September's U.S. jobs report "likely pushes Fed tapering further
into the future and it seems likely we now have to get to March
before we see a meaningful improvement in growth and employment
enough to push the Fed into tapering asset purchases," Allan von
Mehren, chief analyst at Danske Bank, wrote in a note.
"The soft job growth underscores that GDP growth has also
disappointed by tracking just below 2% in [the third quarter]. The
fourth quarter will likely fail to show any increase given the
negative effects from the government shutdown and expected
sentiment hit from the debt-ceiling woes," he added.
Among top performers in the pan-European index, Gjensidige
Forsikring ASA rallied 8% in Oslo after the insurance firm posted a
6% rise in third-quarter earnings per share.
Shares of Reckitt Benckiser Group PLC rallied 5.6% in London
after the consumer-goods company said it expects full-year revenue
growth to be at least 6% and full-year margins to be
maintained.
Shares of Tele2 AB sank 13% after the Swedish telecoms firm said
it swung to a loss in the third quarter and cut its long-term
financial guidance.
U.S. stocks traded mostly higher on Wall Street.
With the highly anticipated U.S. jobs report out of the way,
attention in Europe is now likely to turn to some of the upcoming
events and data releases for the region. On Wednesday, the European
Central Bank will announce details on how it will conduct its
upcoming asset quality review of the euro zone's biggest banks.
"That will certainly be a key event to watch. We've argued in
the past that the way the ECB runs this exercise will have
implications for the broader economy," said Timo del Carpio,
European economist at RBC Capital Markets. "Having a robust
supervisor in place is an important step toward implementing a
banking union. It's important in building confidence in the banking
system and reducing the incentives for cross-border retrenchment of
capital," he added.
Later in the week, the preliminary purchasing managers' indexes
for the major euro-zone economies are out followed by the German
Ifo survey on Friday. "The data we have at the end of this week
will confirm or deny the general narrative about the recovery. We
have had indications over the last few weeks that are consistent
with a slow, but steady recovery," del Carpio said.
France's CAC 40 index gained 0.4% to 4,2942.28, on track for the
highest close in more than five years. Germany's DAX 30 index added
1% to 8,950.45, eyeing an all-time closing high. The U.K.'s FTSE
100 index gained 0.5% to 6,685.67 setting it on track for the best
level since May.
BHP Billiton PLC (BHP) climbed 4% in London after the miner
raised its outlook for full-year iron-ore production, signaling
confidence that China's rapid industrialization will continue to
lift demand for natural resources.
Shares of ARM Holdings PLC (ARMHY) fell 3.2% even as the
microchip designer posted a rise in third-quarter profit and said
it has a record order backlog going into the final fiscal
quarter.
Shares of Novartis AG added 2.4% after the drug maker raised its
full-year outlook for the second consecutive quarter after a
generic version of its blockbuster blood-pressure drug was
delayed.
Swedbank AB climbed 3.8% after the bank posted an increase in
third-quarter profit, boosted by rising net interest-income. It
also said there are signs that the global economy is improving.
Stora Enso Oyj dropped 3.9% after the pulp and paper firm said
fourth-quarter sales and operational EBIT will be lower than the
levels seen in the same quarter last year.
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