By Steve Goldstein, MarketWatch
LONDON (MarketWatch) -- Stocks in Europe rose in mid-morning trade on Wednesday, building on gains as economic data were generally encouraging as central banks appear loathe to hike interest rates.
The pan-European Dow Jones Stoxx 600 (ST:SXXP 249.58, +2.41, +0.98%) rose 1.1% to 249.86, putting the index near the year's annual closing high of 251.34.
The gains came as economic reports were on the encouraging side, with euro-zone gauges of manufacturing and services sentiment rising to multi-month highs, U.K. jobless claims falling for the first time since February 2008 and euro-area consumer prices returning to positive territory.
At 2:15 p.m. Eastern time -- well after the close of trading in Europe -- the Federal Reserve is due to announce its interest-rate decisions. While no change in rates is expected, markets will be on guard for any move in the language accompanying the decision as well as looking to see if the central bank reins in any of its liquidity provisions.
Sweden's Riksbank meanwhile kept rates at 0.25%, while the Norges Bank is expected to hold interest rates at 1.5%.
David Miles, a member of the Bank of England's Monetary Policy Committee, said in a speech that interest rates it sets may be kept lower as banks hold onto more capital.
Of the major benchmarks in Europe, the U.K. FTSE 100 (UK:UKX 5,321, +35.53, +0.67%) rose 0.8% to 5,325.30, the German DAX (DX:DAX 5,887, +75.98, +1.31%) added 1% to 5,888.71 and the French CAC 40 (FR:PX1 3,873, +38.78, +1.01%) rose 1% to 3,871.99.
Futures on the Dow Jones Industrial Average rose 52 points, and the euro (CUR_EURUSD 1.46, +0.00, +0.14%) traded at $1.4566, up 0.2%.
Of other stocks in the spotlight, Zodiac Aerospace (FR:ZC 28.21, +1.66, +6.23%) shares rose 6.1% after UBS upgraded it to buy from neutral, citing a potential recovery of its after-sales market. The maiden flight of the Boeing 787 should also brighten prospects.
Zodiac makes the interiors for the Dreamliner. See Boeing story.
A note from Nomura on the media sector had a big impact on stocks, with the broker saying the late-cycle end of the media sector has lagged cyclicals since the market turn in mid-March and now offers better value, as it prefers professional publishers, agency and satellite/cable sub-sectors and recommends avoiding direct and most of the free-to-air TV companies.
Sky Deutschland (DE:SKYD 1.88, +0.09, +5.03%) rose 5.6% and J.C. Decaux (FR:DEC 17.05, +0.85, +5.21%) , which Nomura lifted to buy, rose 4.9%.
BSkyB (UK:BSY 569.50, -1.00, -0.18%) and Vivendi (FR:VIV 20.49, +0.05, +0.22%) , which Nomura cut to neutral from buy, made fractional gains.
News Corp. owns stakes in both Sky Deutschland and BSkyB and also owns MarketWatch, the publisher of this report.
Barratt Developments (UK:BDEV 115.30, +5.80, +5.30%) , Redrow (UK:RDW 129.70, +7.50, +6.12%) and Taylor Wimpey (UK:TW. 35.06, +1.13, +3.33%) each rose between 3% and 6% as Citigroup upgraded all three to buy from hold, noting that house prices, mortgage applications, housing transactions and consumer confidence all have improved and the sector could even withstand a modest fall in house prices without having to cut asset values.
Philips Electronics (NL:PHIA 20.26, -0.07, -0.32%) (PHG 29.45, -0.34, -1.14%) slipped 0.3%. In a presentation on its consumer lifestyle business, it expects that unit to record fourth-quarter sales of around 2.8 billion euros ($4 billion), which will lead to "another quarter of sustained improvement in financial performance."
That unit had sales of 2.58 billion euros in the third quarter of 2009 and sales of 3.06 billion euros in the fourth quarter of 2008.
Philips also expects the TV business to at least break even next year.
Accor (FR:AC 37.29, -0.86, -2.25%) dropped 1.8% as traders took profits following a long-awaited move by the company's board to authorize a split into two companies, a hotels operator and a services firm focused on prepaid benefits like lunch vouchers.
Pubs operator Punch Taverns (UK:PUB 78.80, -2.35, -2.90%) fell 3%. Managed pub sales fell 1.6% in the last 16 weeks ending Dec. 12, while those at leased pubs tumbled around 11%.
