European stocks rose Thursday as well-received company news and a decent Spanish bond auction offset another dreary euro-zone data release.
Insurers paced the advance, led higher by Italy’s Assicurazioni Generali
. The company posted a 89% drop in 2012 net profit on impairments, but analysts pointed to the stable dividend and an improving operating performance. The stock rose and other insurers followed—AXA,
and ING Groep
were up. The Stoxx Europe 600 index for the sector advanced 1.5%.
Company news also helped to underpin the London market, as retailers put in a solid performance. Wm Morrison
gained after announcing plans to launch its first online food operation in 2014, after its full-year earnings.
In mid caps, shares in Home Retail
Group rose sharply after the company said it had made a good start to a challenging year. Online retailer Ocado
also surged after a trading update for the 12 weeks to Feb. 24 and following an announcement that it is in talks with Wm Morrison over an online food operation venture.
A Spanish bond auction added to the upbeat tone. The 10-year Spanish government bond yield was a little higher, but relatively steady after Spain sold €803 million ($1.04 billion) of longer-dated bonds at a special auction, paying lower funding costs on all three bonds on offer. There was no pre-announced target range, which meant the Treasury was afforded greater flexibility to raise as much money as it deemed fit, without the scrutiny that would accompany a regular auction with pre-announced targets.
Sentiment was supported by the strong reading on U.S. retail sales released Wednesday. This, combined with last Friday’s better-than-expected nonfarm payrolls report, has given investors hope that the U.S. economy may be back on track. The surprisingly resilient report helped the Dow Jones Industrial Average to its ninth straight day of gains Wednesday—its longest winning streak in 16 years.
But it wasn’t all good news Thursday. Investors were confronted with more euro-zone gloom in the form of fourth-quarter employment data, which showed the number of people holding down jobs fell to its lowest in nearly seven years.
“The latest euro-zone unemployment data are both disappointing and worrying,” said Howard Archer at IHS Global Insight. “While euro-zone economic activity seemed to bottom out last October and business confidence has trended up in recent months, neither appears strong enough to prevent further rises in euro-zone unemployment for some time to come—although the situation will vary markedly between countries.”
U.S. futures pointed to a slightly firmer open on Wall Street, where initial jobless claims will be released, along with the Producer Price Index.
In Europe, investors will be looking ahead to the start of the two-day European Union summit in Brussels, where a Cyprus bailout is expected to be discussed.
Write to Michele Maatouk at firstname.lastname@example.org
Earnings, Spain Bonds Boost Europe Stocks – Wall Street Journal