Infineon Technologies AG and STMicroelectronics NV paced a rally among European chipmakers after Intel forecast sales that topped analysts’ estimates. Allied Irish Banks Plc climbed 6.6 percent as Goldman Sachs Group Inc. recommended buying the shares. Ericsson AB rallied the most in five months after Credit Suisse Group AG boosted its rating on the stock. Shares in Greece declined as billionaire investor George Soros said the cost of borrowing in the nation’s rescue package is too high.
The Stoxx Europe 600 Index gained 0.6 percent to 270.23 as of 12:01 p.m. in London. The benchmark gauge for European equities has climbed 6.3 percent in 2010 as the European Union agreed a $61 billion aid proposal to help Greece tackle the region’s biggest budget deficit and the U.S. Federal Reserve pledged to maintain record-low interest rates for an extended period to secure the economic recovery.
“We’ll see coming up in these quarterly results some revenue numbers that reassure people that if last year was all about cutting costs then this year is about rebuilding sales with a lower cost base,” said Jeremy Podger, London-based head of global equities at Threadneedle Asset Management Ltd., which has about $93 billion in client assets. “This will give people confidence to go back into equities. It’s a positive story.”
Earnings Season
The first-quarter earnings season began in the U.S. this week, with analysts predicting combined profit for S&P 500 companies increased 30 percent from a year earlier, according to estimates compiled by Bloomberg. The Stoxx 600 has surged 71 percent and the S&P 500 has jumped 77 percent from lows in March 2009 as the economy returned to growth.
Intel climbed 4.2 percent to $23.73 in early New York trading after the world’s biggest chipmaker yesterday forecast rising sales this quarter and record profit margins for the year.
Second-quarter revenue will climb as high as $10.6 billion, exceeding analysts’ predictions, and 2010 gross margins will widen to a record, Intel said. Net income surged almost fourfold in the three months through March.
Futures on the Standard & Poor’s 500 Index expiring in June rose 0.3 percent while the MSCI Asia Pacific Index climbed 0.7 percent.
Singapore Growth
Samsung Electronics Co., the world’s biggest chipmaker after Intel, gained 2.2 percent in Seoul. Tokyo Electron Ltd. advanced 3.6 percent in Tokyo after the company said orders for machines that make semiconductors and flat-panel displays rose.
Singapore unexpectedly revalued its currency, triggering the biggest gain in a year, after the government raised forecasts for economic growth and inflation.
Infineon Technologies, Europe’s second-largest chipmaker, climbed 2.6 percent to 5.2 euros. STMicroelectronics gained 3.4 percent to 7.78 euros. ARM Holdings Plc, the U.K. designer of semiconductors used in Apple Inc.’s iPhone, advanced 1.1 percent to 235.8 pence. Cap Gemini SA, Europe’s largest computer services company, rallied 5.6 percent to 38.77 euros.
ASML Holding NV gained 0.5 percent to 26.29 euros as Europe’s largest maker of semiconductor equipment reported net income for the first quarter of 107 million euros ($146 million), beating the 101 million-euro average forecast of analysts surveyed by Bloomberg. The semiconductor equipment maker said second-quarter sales will be 50 million euros higher than previous forecasts.
Ericsson, Allied Irish
JPMorgan climbed 1.8 percent to $46.70 in pre-market trading in New York. The second-biggest U.S. bank by assets beat analysts’ estimates as first-quarter earnings rose 55 percent on higher trading revenue.
Ericsson AB rallied 3.9 percent to 77.20 kronor, the biggest gain since Oct. 30. Credit Suisse raised its recommendation on the shares to “outperform” from “neutral,” saying the outlook for sales is improving.
Allied Irish Banks surged 7.2 percent to 1.54 euros as Goldman Sachs upgraded the shares to “buy” from “neutral.”
UBS AG gained 1.9 percent to 18.4 Swiss francs. Chief Executive Officer Oswald Gruebel said he’s upbeat about the prospects for Switzerland’s biggest bank after a return to profit, even as he predicted further withdrawals at the private bank.
Postbank Integration
Deutsche Postbank AG climbed 5.5 percent to 25.24 euros. Deutsche Bank AG’s preparations for the integration of Deutsche Postbank are more advanced than expected as the company pushes ahead with a shared information technology platform, Handelsblatt reported, without saying where it got the information.
Yell Group Plc, the publisher of the U.K.’s yellow pages directory, rose 3.6 percent to 52.3 pence after UBS AG added the shares to its “most preferred” list.
Greece’s ASE Index fell 2.2 percent, led by banks. National Bank of Greece SA, the country’s biggest lender, dropped 4.4 percent to 13.19 euros. EFG Eurobank Ergasias SA, the second largest, declined 5.3 percent to 6.25 euros, the biggest decline on the Stoxx 600 today. Goldman Sachs analysts lowered price estimates for both banks, according to a report today.
Greece faces the danger of a “death spiral” because the cost of borrowing in the euro region’s rescue package is too expensive, billionaire investor George Soros said at an event late yesterday in London.
