MW: Miners lead European shares to fourth day of gains
ThyssenKrupp upgraded; Hennes & Mauritz posts comparable-sales drop
By Sarah Turner, MarketWatch
LONDON (MarketWatch) -- European shares rose Monday, with miners advancing as dollar weakness boosted metals futures, while deals and broker upgrades lent a hand elsewhere.
The pan-European Dow Jones Stoxx 600 index (ST:SXXP 249.94, +2.14, +0.86%) , up for the fourth straight session, rose 0.8% to 249.87, building on a 2.8% gain made in the last week.
Strategists at Charles Schwab see potential for further gains. "We believe the general market trend will continue to be higher, but gains are likely to be more muted, and bumps along the way are inevitable," they said.
Miners were leading the advance on Monday, with Rio Tinto (UK:RIO 3,284, +150.50, +4.80%) (RTP 220.24, +10.19, +4.85%) shares up 4.9% and Randgold Resources (UK:RRS 4,930, +226.00, +4.80%) shares up 4.6%.
The gains came as the dollar slipped against major rivals, pressured by stepped-up rhetoric from China, better-than-expected Japanese growth data and rising gold futures. Read more on gold. Read more on dollar.
Autos were also strong, after new passenger car registrations in Europe rose 11.2% last month, with Peugeot (FR:UG 25.11, +0.76, +3.10%) shares up 2.8% and Daimler (DE:DAI 35.69, +1.35, +3.92%) (DAI 51.16, +0.85, +1.69%) shares up 3.4%. Read more on auto data.
On a regional level, the U.K. FTSE 100 index (UK:UKX 5,353, +56.57, +1.07%) rose 1.2% to 5,359.37, the German DAX index (DX:DAX 5,748, +60.93, +1.07%) climbed 1% to 5,744.80 and the French CAC-40 index (FR:PX1 3,839, +32.80, +0.86%) advanced 0.9% to 3,840.22.
Russia's RTS index jumped 2.7% to 1,461.58.
Asian shares were higher, and U.S. stock futures were indicating early gains on Wall Street, with Dow Jones Industrial futures up 61 points. See Indications.
Turning to corporate updates, European Aeronautic Defense & Space Co. (FR:PAR 54.78, +0.30, +0.55%) gained 2.9%
It swung to a third-quarter net loss of 87 million euros from a profit of 679 million euros a year ago, but stuck to its fiscal-year new order target for its Airbus operations. Read more on EADS earnings.
Hennes & Mauritz (SE:HMB 436.00, +2.50, +0.58%) shares fell 4% after it said that October comparable-store sales fell 3%, below analyst forecasts for a 3.3% rise.
The Stockholm clothing retailer said sales continue weak in most markets, notably France, Spain and the U.S., while sales in Scandinavia, Central Europe and Asia were "very satisfactory."
Some European companies were boosted by takeover interest from outside the region.
Oce (NL:OCE 8.53, +3.47, +68.41%) shares soared 69% to 8.54 euros after Canon (CAJ 37.99, +0.43, +1.14%) , the Tokyo maker of cameras and office equipment, offered 730 million euros ($1.09 billion), or 8.60 euros a share, to buy the Venlo, Netherlands, producer of copiers and printers.
Tandberg (NO:TAA 164.00, +6.40, +4.06%) shares climbed 4% to 163.90 kroner after Cisco Systems (CSCO 23.67, -0.04, -0.17%) increased its bid for the firm to 19 billion Norwegian kroner ($3.4 billion), as the U.S. networks giant seeks to overcome resistance from shareholders of the Norwegian videoconferencing company.
Cisco, with some $35 billion of cash, took its bid for Tandberg to 170 kroner a share in cash, above its previous bid of 153.5 kroner. Read more on latest Cisco offer.
On the other hand Vivendi (FR:VIV 19.32, -0.49, -2.47%) shares fell 1.8% in Paris after it launched an improved bid for Brazil's GVT Holding. Vivendi offered 56 reals a share, equivalent to around 2.8 billion euros, up from a previous bid of 42 reals a share.
The offer tops Telefonica's (ES:TEF 19.25, +0.15, +0.79%) (TEF 86.29, +0.77, +0.90%) latest bid of 50.50 reals a share. Telefonica shares were up 0.2% in Madrid.
Broker upgrades were in focus, with shares of steel and industrial group ThyssenKrupp (DE:TKA 24.56, +0.64, +2.68%) up 3.3% after it was upgraded to overweight from neutral at J.P. Morgan.
The broker said that management has stabilized the balance sheet and positioned the company for a substantial recovery in pre-tax profit in the next fiscal year, even including nearly 500 million euros ($748 million) in incremental headwinds associated with the startup of steel plants in the Americas.
Deutsche Bank separately upped ThyssenKrupp to hold from sell, as the broker cited the firm's cash flow but noted concerns in Brazil and the U.S. And Societe Generale upgraded the steelmaker to buy from hold.
Fraport (DE:FRA 34.38, +1.52, +4.63%) shares jumped 3.2% and Yara (NO:YAR 208.30, +8.70, +4.36%) shares rose 4.2% after both firms were upgraded to buy from hold at Citigroup.
The broker said that airport operator Fraport offers value on an improving outlook, while fertilizer producer Yara should benefit from grain and gas prices in 2010.
