European stocks climbed for a second day as companies including Unilever and Sanofi posted results that exceeded analysts’ estimates, Bloomberg has reported.
Unilever gained 2.6 per cent, its biggest advance in almost three months, after quarterly sales grew faster than analysts had projected. Sanofi rose 1.4 per cent after France’s largest drugmaker reported third-quarter profit that retreated less than analysts had predicted. Daimler AG slid 2.7 per cent after the world’s third-largest luxury carmaker abandoned its profit- margin target for 2013.
The Stoxx Europe 600 Index increased 0.3 per cent to 270.23 at the close in London as a report showed the U.K. moved out of recession in the third quarter. The gauge has still declined 1.4 per cent so far this week as company earnings missed estimates. The equity benchmark has risen 16 per cent from a June 4 low as the European Central Bank and the Federal Reserve announced open-ended bond-buying programs.
“With Europe still in recession, expectations of earnings have been moderate, so many companies beat estimates,” said Manish Singh, who helps oversee $2 billion of assets as head of investment at Crossbridge Capital in London. “Perhaps investors are ready to wait for things to get better. On the U.K. gross domestic product, the initial cheer may be short lived. We won’t have an Olympics every quarter and we need more confirmation to feel the U.K. is out of recession.”
Thirty-four companies in the Stoxx 600 post earnings today, according to data compiled by Bloomberg. Of the 89 companies that have reported profit so far this season, 47 have beaten estimates, while 41 have missed them.
The U.K.’s economy expanded in the third quarter more than predicted, rebounding from a recession. Gross domestic product climbed 1 per cent from the second quarter, when it dropped 0.4 per cent, the Office for National Statistics said. Economists in a Bloomberg survey had predicted a 0.6 per cent increase.
In the U.S., a Commerce Department release showed orders for durable goods rose 9.9 per cent in September. They dropped a revised 13.1 percent in August. Economists had forecast a 7.5 per cent increase.
A Labor Department report showed that jobless claims declined to 369,000 in the week ended Oct. 20, following a revised 392,000 a week earlier. The median estimate of economists surveyed by Bloomberg had called for 370,000.