European stocks decline as Holcim, PostNL retreat on earnings
By Bloomberg
European stocks fell, after this year's biggest weekly rally, as investors weighed disappointing earnings from PostNL NV and Holcim Ltd.
The Stoxx Europe 600 Index slid 0.3 percent to 335.86 at 11:32 a.m. in London as Italian utilities led the decline. The Stoxx 600 rallied 2.9 percent last week as the Bank of Japan unexpectedly boosted its stimulus. The benchmark measure has rallied 8.3 percent from this year's low on Oct. 16 and trades at 15.6 times the projected earnings of its members, near the highest valuation since 2009.
"Markets are taking a small break from the strong rebound," said Espen Furnes, who helps oversee $85 billion at Storebrand Asset Management in Oslo. "Investors are still cautious. The reporting season is the main topic for investors. Ryanair numbers were surprisingly strong. On the other hand, the PostNL numbers were weaker than expected, and shares are falling despite the company upholding full-year guidance. From now on, reactions will be more stock-specific."
Standard & Poor's 500 Index futures slid less than 0.1 percent today, while the MSCI Asia Pacific Index lost 0.8 percent.
Holcim dropped 2.6 percent after the cement maker posted third-quarter net income and revenue that missed analysts' projections as fluctuations in emerging-market currencies hurt results.
PostNL slid 8 percent after reporting third-quarter net income of 12 million euros ($15 million), less than half the 26 million-euro estimate of analysts surveyed by Bloomberg.
Italian Utilities
Snam SpA slumped 11 percent and Terna Rete Elettrica Nazionale SpA lost 5.9 percent, pushing a gauge of European utilities to the worst performance among 19 industry groups in the Stoxx 600. Mediobanca SpA cut its rating on Snam the an equivalent of sell and that of Terna to rating similar to hold.
Publicis Groupe SA fell 2.6 percent after the world's third-largest advertising company agreed to buy Boston-based Sapient Corp. for $3.7 billion in an all-cash deal.
Ryanair Holdings Plc jumped 8.8 percent to 8.27 euros, its highest price since it sold shares to the public in 1997, after raising its full-year profit forecast. The discount airline said it expects net income of 750 million euros ($937 million) to 770 million euros for the 12 months through March 2015, at least 100 million euros more than it forecast previously.
Portugal Telecom SA advanced 5.3 percent after Altice SA made an $8.8 billion offer to buy Oi SA's Portuguese telecommunications assets. A deal would unwind a merger between Portugal Telecom and Oi that has been marred by debt defaulted by a unit of Grupo Espirito Santo and a management change.
In the U.S., a report from the Institute for Supply Management may show a manufacturing growth slowed down last month, economists surveyed by Bloomberg projected.