ARM Holdings soars 7.8% on reports of new Microsoft system By Barbara Kollmeyer, MarketWatch MADRID (MarketWatch) — European stock markets struggled to extend their winning streak into a third session Wednesday, as investors hoped for an upside surprise in U.S. economic-growth data later and as auto stocks gained ground. The Stoxx Europe 600 index (ST:STOXX600 281.40, +0.29, +0.10%) rose 0.2% to 281.55 in volatile trading. The benchmark closed up 1% in the prior session. “A positive that is lifting Europe is coming from the U.S. where forecasters are revising up their GDP forecasts and some of them are even going for 4% in 2011,” said Stephen Pope, managing partner at Spotlight Ideas. “GDP growth of that magnitude would see U.S. unemployment slip from 9.8% in dramatic style,” he added, in emailed comments. Economists polled by MarketWatch are expecting third-quarter gross domestic product to be revised up to a 3% rate from a prior estimate of 2.5%. The final GDP revision for the three months through September is due at 8:30 a.m. Eastern. Autos supported the upside move in Europe, as reflected in a 1.3% gain for shares of Renault SA (FR:RNO 44.99, +0.64, +1.43%) and a 0.7% rise for Volkswagen AG (DE:VOW3 130.13, +1.03, +0.80%) . Pope pointed to a Gallup survey that referred to optimism for 2011 in the emerging world, notably Brazil, India and China. “As the middle classes expand they will want more autos and better health care, so profit potential is being priced in,” he said. At the regional level, the French CAC 40 index (FR:PX1 3,927, -0.53, -0.01%) was flat at 3,927.27, but shares of LVMH Moet Hennessy Louis Vuitton SA (FR:MC 127.95, +2.55, +2.03%) traded higher, up 2.3%. After the close Tuesday, the company said it was raising to 20% its stake in Hermes International SA (FR:RMS 161.00, +4.30, +2.75%) , shares of which added more than 3% in Paris. Germany’s DAX 30 index (DX:DAX 7,079, +0.80, +0.01%) ticked up 0.04% to 7,080.82. Shares of German airline Deutsche Lufthansa AG (DE:LHA 16.83, +0.17, +1.02%) added 1.1%, recovering some ground lost as harsh wintry weather disrupted flights across Europe and the U.K. in recent days, while Infineon Technologies AG (DE:IFX 7.20, +0.06, +0.83%) rose 1% in Frankfurt. London’s FTSE 100 index (UK:UKX 5,964, +12.66, +0.21%) rose 0.2% to 5,965.65, supported by a 8.9% rally in ARM Holdings PLC (UK:ARM 439.60, +36.10, +8.95%) . ARM’s shares jumped on media reports that Microsoft Corp. (MSFT 28.07, +0.26, +0.93%) will announce a new version of its Windows operating system that runs on technology provided by ARM. On the downside, oil stocks traded weaker, with shares of Essar Energy PLC (UK:ESSR 578.00, -7.00, -1.20%) off 1.2% and BP PLC (BP 43.54, -0.14, -0.32%) (UK:BP. 468.35, -4.10, -0.87%) down 1%. Elsewhere, the Greece ASE Composite (XX:COMPO 1,459, +9.45, +0.65%) fell 0.8% to 1,447.69, with shares of the National Bank of Greece SA (NBG 1.74, +0.04, +2.35%) moving down 2%. Late Tuesday, Fitch Ratings Service warned it could downgrade Greek debt to junk status from its current BBB- rating. The review is expected to be completed in January, with Fitch due to look at the country’s fiscal sustainability, economic outlook, and reform efforts by the government.

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