By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- European stocks jumped on Thursday,
gaining for a third consecutive session following upbeat U.S.
economic data.
The Stoxx Europe 600 index rose 0.7% to end at 286.42, following
a rise of 1.7% on Wednesday.
A slew of U.S. data underpinned gains for most of Europe's
markets. Weekly jobless claims fell and personal spending and
incomes rose in May. Pending-home sales jumped in May to reach a
six-year high.
"I think investors are now gearing portfolios for the U.S.
economic recovery, picking growth-focused assets which include
large-cap European stocks exposed heavily to the U.S. recovery --
construction, housing stocks/industrials and auto makers," said
Ishaq Siddiqi, market strategist at ETX Capital, in emailed
comments.
Shares of Alcatel-Lucent rose 6.4%. In a note on Thursday,
Morgan Stanley reiterated its overweight recommendation on the
stock, saying the company's recent issuance of a EUR630 million
($820 million) convertible bond is positive for equity holders.
Shares of Subsea 7 SA tumbled nearly 14% after the Norwegian
oilfield-services group lowered its full-year earnings outlook due
to project-cost overruns in Brazil.
In Greece, the ASE Composite index fell 1.2% to 826.81, with
shares of National Bank of Greece SA (NBG) tumbling more than 24%.
The Greek market fell after a report in the Financial Times
suggested the country's bailout program was running out of cash due
to a finance gap.
European finance ministers reached an agreement Thursday on
rules for winding down insolvent banks, inking a deal in which
banks' shareholders, creditors and big depositors would take the
first hit in the event of a bank crisis. The deal needs legislative
approval from the European Parliament.
In economic news, German unemployment numbers for June dropped
unexpectedly, while euro-zone confidence numbers rose to the
highest in a year. (Read more about the data
http://www.marketwatch.com/story/euro-zone-confidence-rises-to-highest-in-year-2013-06-27.)
Upbeat day for London
In London, the FTSE 100 index jumped 1.3% to 6,243.40, as
resource stocks pushed higher. Oil firm Royal Dutch Shell PLC
(RDSA) rose 2%, while miner BHP Billiton PLC rose 1.3%.
"Miners had a horrid day yesterday on the drop in gold prices,
but the stabilization in commodity prices today has prompted a
rebound," said ETX Capital's Siddiqi.
Shares of WPP PLC jumped 4.5% after Bank of America/Merrill
Lynch added the advertising group to its most preferred list,
citing an "attractive combination of value and growth."
Smiths Group PLC rose 3.9% after an upgrade to buy from neutral
at UBS, which said the shares are not reflecting upside from a
potential sale of its medical division.
J.P. Morgan Cazenove made several downgrades to the chemical
sector, saying "after three years of tailwinds, the good times may
be over," and potential headwinds lie ahead. BASF SE , Lanxess AG
and Solvay SA were cut to underweight from neutral. Those shares
were off 2%, 3.3%, and 2.2%, respectively.
The German DAX 30 index gained 0.6% to 7,990.75
Shares of sports-gear maker Adidas AG rose 3.3% after a Barclays
upgrade to overweight from equal weight. Barclays said Adidas
continues to look attractive relative to peers, brushing off
worries over emerging-markets exposure. Commerzbank AG dropped
4.4%, the biggest decliner in the DAX 30.
The French CAC 40 index rose 1% to 3,762.19, with shares of
heavyweight oil group (TOT) gaining 1.5% on the heels of higher oil
prices.
Drugmaker Sanofi SA (SNY) climbed 1.3%.
In Spain, shares of Bankia SA gained 1% after it sold its stake
in International Consolidated Airlines Group SA for 675 million
euros ($879 million). Shares of IAG fell 0.2% in London.
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