EUROPE MARKETS: Europe Stocks End Higher, Post Weekly Gains
By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- European stocks ended higher on Friday and rose for the week, with Swatch Group AG and Deutsche Lufthansa AG among the shares posting the biggest gains.
The Stoxx Europe 600 rose 0.5% to end at 329.95, leaving it up 0.7% for the week. The benchmark pared some intraday gains after data showed the U.S. economy added 74,000 jobs in December, the smallest rise since the beginning of 2011. The more optimistic forecasters expected a rise of 200,000 or higher.
The unemployment rate fell to 6.7% as more people dropped out of the workforce.
Deutsche Lufthansa jumped nearly 9% after the German airline said it sees lower fuel and restructuring costs for 2014.
Shares of Swiss watch group Swatch rose 3.6%. Swatch missed its 2013 gross-sales target, but said 2014 was looking positive and all brands had gotten off to a strong start in January. Related stocks also rose, with luxury-eye-wear company Luxottica Group SpA up 2% and luxury-goods group Compagnie Financiere Richemont SA up 4%.
Metro AG shares rose 2.8%. Media reports pointed to a report in Platow Brief, a business newsletter, that said Franz Haniel & Cie, which has a 30% stake in the German retailer, may push it to sell a couple of units. Metro's chief executive officer reportedly opposes those sales, and the report said his contract may not be renewed this year. A spokesman for the companies could not be reached for comment.
The European Central Bank left monetary policy unchanged on Thursday and its president, Mario Draghi, pledged to take further easing action if needed, but investors were left disappointed by no concrete plans from Draghi to curb the deflation risk for the euro zone.
Stocks in Europe have been drawing more investors and borrowing costs for peripheral areas have been declining on the view that the economic recovery is taking hold. European stocks were underpinned Friday by data that showed French industrial production rose 1.3% in November, well beyond what forecasters had projected.
"I see the move today as related to two things," said Stephen Pope, managing partner at Spotlight Ideas. "Yesterday, the ECB stayed by the mantra that in the medium term, the economy will make positive improvements. I find the more compelling factor being earnings and outlooks that have been issued by several major names in the past few days." Companies such as Swatch are an example of that, he said.
Gainers far outweighed decliners, but Carlsberg AS was among the stocks moving south. It dropped 0.6% after Goldman Sachs cut the brewer to sell from neutral, citing dilutive mergers and acquisition risk, and exposure to structurally weak European economies.
The German DAX 30 index rose 0.6% to 9,473.24, while the French CAC 40 index added 0.6% to 4,250.60.
The U.K.'sFTSE 100 index rose 0.7% to 6,739.94 as HSBC Holdings PLC (HSBC) gained 1.1%.
Among drug stocks, Novartis AG (NVS) gained 1.2% and Roche Holding Ltd. (RHHBY) rose 0.5%.
Shares of BP PLC (BP) shook off a downgrade from Exane BNP Paribas, which cut it to neutral from overweight, along with Total SA (TOT) . BP rose 0.3% and Total added 0.6% as oil prices pushed higher.
Royal Dutch Shell PLC (RDSA) gained 2.1% after Exane analysts lifted shares to outperform from neutral.
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