European stocks fell before earnings reports this week from GlaxoSmithKline Plc, the region’s biggest drugmaker, and ABN Amro Holding NV, the largest Dutch bank.
Credit Suisse Group slid after ING Groep NV downgraded the shares following a “good run.” Ryanair Holdings Plc rose the most in two years after Europe’s biggest discount carrier raised its forecast following earnings that topped analysts’ estimates.
The Dow Jones Stoxx 600 Index lost 0.1 % to 378.58 as of 1:45 p.m. in London. The Stoxx 50 also slipped 0.1 %, and the Euro Stoxx 50, a measure for the 13 nations sharing the euro, dropped less than 0.1 percent.
Stocks climbed to a six-year high last week as bid speculation fueled gains by retailers and construction companies, and the Federal Reserve signaled the U.S. economy is growing without triggering inflation. Faurecia SA today reported its loss unexpectedly widened and Havas SA last week posted revenue that missed analysts’ estimates.
“Earnings reports are mixed and outlooks have been cautious,” said Xavier Delaye, a fund manager at DNCA Finance in Paris, which oversees $1.6 billion in equities. “The market has risen a lot. There’s now some locking in of gains. We’re relatively cautious.”
Profit growth for companies in the Stoxx 600 will likely fall to an average 10.5 % in 2007, according to estimates compiled by FactSet Research Systems Inc. in London. That compares with a forecast 13 % for last year.
National indexes rose in 11 of the 18 western European markets. The U.K.’s FTSE 100 and France’s CAC 40 were little changed. Germany’s DAX declined 0.2 %.
Indexes retreated after Sky News reported a letter bomb exploded in Victoria Street in central London.
Glaxo fell 1.6 % to 1,398 %. The company will probably say on 8 February that profit rose at the slowest pace in six quarters as demand faltered for the company’s best-selling asthma and diabetes pills in the U.S.
ABN Amro, the biggest Dutch bank, is expected to say fourth- quarter earnings declined from a year earlier. The shares were unchanged at €24.71.
Credit Suisse dropped 1 % to 87.8 Swiss francs. ING analysts downgraded the stock to “hold” from “buy,” citing limited potential for price gains. The shares surged 18 % in the fourth quarter 2006 and have gained 2.7 % so far this year.
Ryanair jumped 6.5 % to € 11.95 . The company increased its full-year forecast after third-quarter profit unexpectedly increased 30 % on higher fares and baggage charges. Net income rose to €47.7 million ($61.7 million) for the three months ended 31 December. The figure was more than the median estimate of €21 million by nine analysts.
Faurecia tumbled 5.6 % to €51 . Europe’s largest maker of automotive interiors said its second-half loss widened, missing analysts’ estimates, after the company cut the value of some interiors business assets for the second straight year and took a charge for job cuts.
Havas, the world’s sixth-largest advertising company, dropped 2.8 % to 4.49 euros. Revenue fell to 410 million euros ($531 million) in the fourth quarter, Havas said on 2 February after markets closed. Havas was expecting sales rise close to €425.2 million.
BP-led energy stocks remained higher after oil closed at its highest this year. Europe’s second-largest oil company added 1.3 % to 542 pence. Goldman, Sachs & Co. raised its recommendation on the stock to “buy” from “neutral.”
Total SA, the region’s largest oil refiner, added 0.9 % to €53.1 .
Crude for March delivery climbed as much as 3 % to $59.02 a barrel on 2 February on the New York Mercantile Exchange, the highest close since 29 December. The contract was recently little changed at $58.89.
“If raw materials remain high, there’s no reason for the oil price to be any different,” said Cardif’s Ducros. “This is good for oil stocks.”
E.ON AG gained 0.5 % to 110.01 pence. Germany’s biggest utility may succeed in buying Endesa SA after raising its unsolicited bid for the Spanish electricity company by 12 % to €41 billion .
The Dusseldorf-based power and gas supplier increased its offer to €38.75 a share in cash, within 0.7 % of Endesa’s closing price on Friday, of €39.04 . Shares of the Madrid-based utility have traded above the takeover value for more than two months. They fell 2.7 % to € 37.99 today.
“We are going to see more” takeovers in the power industry, said Lucy MacDonald, chief investment officer of global equities at RCM in London, which oversees $100 billion. “The fact that the energy market is opening up will mean there is continued pressure for consolidation.”
Barratt Developments Plc advanced 4.2 % to 1,280 pence. The U.K.’s biggest homebuilder by volume said it will pay 2.2 billion pounds ($4.32 billion) for Wilson Bowden Plc. The Financial Times reported the news earlier today. Barratt advanced 4.4 % to 1,282 pence. Wilson Bowden shares fell 1.9% to 2,269 pence.
Renewable Energy Corp ASA, a Norwegian maker of components for solar-energy products, plunged 6.9 % to 148 kroner, leading declines in the Stoxx 600. Good Energies Investments BV, the company’s largest stakeholder, sold shares at a 34 % discount, the companies said today.
Atos Origin SA sank 4.1 % to €42.44 . The supplier of computer services for the Olympic Games will take a charge of as much as €400 million after margins declined in the U.K. and Italy.
BT Group Plc gained 1.9 % to 315 pence. Dresdner Kleinwort raised its recommendation on shares of the U.K.’s largest phone company to “buy” from “hold.” Citigroup Inc. increased its price estimate on the stock to 335 pence from 315.
Separately, Credit Suisse Group may give the contract for all of its telecommunications needs to BT, in a deal worth $1.8 billion over seven years, the Financial Times said, citing unidentified people close to the situation.