European Stocks Rise For First Time In Three Days

Bloomberg: European stocks rose for the first time in three days on speculation that the Federal Reserve will opt for more stimulus and as Lafarge SA (LG) targeted cost savings. U.S. index futures advanced, while Asian shares retreated.

Lafarge increased 1.2 percent after the world’s largest cement maker predicted that it will save 1.3 billion euros ($1.6 billion) from 2012 through 2015. TomTom NV (TOM2) rallied 12 percent after Apple Inc. agreed to use its digital maps. Lagardere SCA (MMB) fell after lowering an advertising-revenue target.

The Stoxx Europe 600 Index (SXXP) gained 0.4 percent to 242.83 at 12:17 p.m. in London. Futures on the Standard & Poor’s 500 Index expiring in September added 0.4 percent, while the MSCI Asia Pacific Index slid 0.6 percent.

“There is hope,” said Jerome Forneris, who helps manage $8.5 billion at Banque Martin Maurel in Marseille. “People will say: in nine days, the Fed will do what it can to support the economy. It’s a very important factor of support for U.S. and European stocks. It wouldn’t surprise me to see a strong announcement from the Fed to boost the U.S. economy.”

The Federal Open Market Committee holds its next policy meeting on June 20. Federal Reserve Bank of Chicago President Charles Evans said he would support a variety of measures to generate faster job growth.

 

Evans Favors Stimulus

“I’ve been in favor of pretty much any accommodative policy I’ve heard about,” Evans said in an interview on Bloomberg Television’s “In the Loop” with Betty Liu for broadcast today. “Extending the Twist would be useful,” he said, referring to a plan expiring this month that lengthens the average duration of bonds in the Fed’s portfolio. “More asset purchases would be useful. More mortgage-backed security purchases would be good.”

The Stoxx 600 yesterday erased a gain of as much as 1.9 percent to close unchanged as optimism faded that the 100 billion euro bank bailout for Spain would contain the debt crisis. The gauge has retreated 11 percent from its high this year on March 16.

The yield on Spain’s 10-year bonds rose 14 basis points to 6.65 percent today, approaching the euro-era record of 6.78 percent reached on Nov. 17.

Fitch Ratings Managing Director Ed Parker said that Spain’s government will miss its budget-deficit targets for this year and next. Parker spoke at an event in Oslo today.

 

Italian Debt Auction

Italy plans to auction at least 9.5 billion euros of debt this week, while an election on June 17 may determine whether Greece remains in the euro.

German Chancellor Angela Merkel, Finance Minister Wolfgang Schaeuble and European Central Bank policy maker Joerg Asmussen will speak in Berlin today about the debt crisis.

Lafarge advanced 1.2 percent to 31 euros after saying that it expects to generate at least 1.75 billion euros in earnings before interest, taxes and depreciation for the four years from 2012 through 2015. The company said it will achieve its forecast through cost cuts and an increase in earnings.

TomTom climbed 12 percent to 3.67 euros, its biggest rally since April, after Apple agreed to use its digital maps in the next version of its mobile software.

Lagardere slipped 2.4 percent to 18.85 euros. France’s largest publishing company lowered its advertising revenue target for its media business for this year. The company retained its outlook for earnings before interest and taxes at the unit. Lagardere forecast that media-advertising sales will fall 3 percent to 5 percent. It had predicted flat revenue growth for the year.

Amlin Plc (AML), an insurer, added 1.9 percent to 329.7 pence. The stock was raised to buy from hold at Deutsche Bank AG.

Bankinter SA (BKT) led shares of lenders lower. Bankinter lost 3.2 percent to 2.42 euros.

JPMorgan Chase & Co. said it remains cautious on the European banking industry in the long term. The Spanish bank bailout package is a transfer of risk from lenders to the taxpayer, analyst Kian Abouhossein said.

The volume of shares changing hands on the Stoxx 600 was 19 percent higher than the average of the last 30 days, according to data compiled by Bloomberg.

reporter on this story: Adria Cimino in Paris