Stock Market News

Earnings Growth

KPN, the largest Dutch phone company, said third-quarter profit rose 5.2 percent to 346 million euros, driven by earnings growth at its German mobile unit. KPN had been expected to report net income of 378 million euros, the median estimates of 11 analysts surveyed by Bloomberg News. The shares dropped 0.8 percent to 10.6 euros.

Metro AG, Germany’s largest retailer, slid 1 percent to 45.52 euros. Third-quarter profit fell 31 percent to 81.5 million euros as a year-earlier gain wasn’t repeated and the acquisition of a Polish superstore chain and German Wal-Marts added costs.

That was below the 101 million euros median forecast by nine analysts in a Bloomberg survey.

Cap Gemini SA, Europe’s biggest computer-services company, added 2.7 percent to 44.9 euros after Aurel Leven raised its recommendation on the stock to “buy” from “hold.” The company agreed yesterday to buy Kanbay International Inc. for $1.25 billion, doubling its staff in India to win more contracts helping banks run their global networks.

Source : Bloomberg

U.S. stock futures pointed to a slightly higher market open on Wednesday, boosted by investor optimism about strong earnings after online retailer Amazon.com posted quarterly profit and revenue above Wall Street estimates.

But many investors were hesitant to take new positions before the Federal Reserve wraps up a two-day policy setting meeting later on Wednesday. Though investors expect the Fed to keep interest rates on hold, an accompanying Fed statement could give clues about the outlook for rates.

Amazon.com shares leapt 14.6 percent in European trading after the company’s profit and revenue beat analysts’ estimates.

Source : Reuters

The 50-issue Nifty rose 1.41 percent at 3,728.10 points, although it was still below its May peak of 3,774.15.

The main index has risen more than 37 percent this year, driven by domestic and foreign buying of equities on expectations of robust profit growth in Asia’s fourth-largest economy.

“Momentum is high in the market, and there is some position building happening in software stocks. We expect the index to remain strong for the day. Much depends on how TCS reports results,” said Vinod Bansal, director at VeniMadhav Securities.

Gainers were led by Tata Consultancy Services (TCS), Infosys Technologies Ltd. and petrochemical giant Reliance Industries Ltd., which touched record highs.

Source : Reuters

Takeovers and better-than-expected earnings have lifted the Stoxx 600 to its highest since May 2001. A pause in interest-rate increases by the U.S. Federal Reserve has helped alleviate concern that a slowdown in the world’s largest economy will be abrupt.

“Results have surprised on the upside, and with a positive economic background, this is an attractive scenario for stocks,” said Cesar Martinez, who helps manage $13 billion at Gesmadrid SA in Madrid. He said he favors shares of phone companies Vodafone and Telefonica SA.

As of last week, a record $1.3 trillion had been spent on European mergers and acquisitions, up from $819 billion for the same period last year, based on data compiled by Bloomberg. Companies in the Stoxx 50 reported last quarter their best earnings in at least 11 quarters, based on Bloomberg analysis of results that surpassed analysts’ estimates.

The Fed has kept its key rate on hold since August after a two-year run of 17 straight rate increases. The U.S. is Europe’s largest export market

Source : BloomBerg

The U.S. economy has slowed more dramatically than most economists expected just a few weeks ago, leaving it more vulnerable to a recession.

Forecasters at Goldman Sachs Group Inc. and AllianceBernstein Holding LP in New York have cut their growth estimates for the just-ended third quarter to an annual rate of 2 percent or less. They don’t foresee much, if any, improvement in the fourth quarter: Auto-production cuts and slumping home sales are likely to overwhelm any boost the economy gets from lower gasoline prices, they say.

`We’re decelerating fairly significantly,” says Peter Hooper, a former Federal Reserve official who’s now chief economist at Deutsche Bank Securities Inc. in New York. He sees annual growth below 2 percent in the second half. The economy expanded at a 2.6 percent rate in the second quarter and 5.6 percent in the first.

Source : BloomBerg