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European stocks hit 5 day high { March 17 2004 } Original Source Link: (May no longer be active)
http://money.cnn.com/2004/03/17/news/international/europe_close.reut/http://money.cnn.com/2004/03/17/news/international/europe_close.reut/
European stocks hit 5-day high
Strong technology gains, Fed follow up lead Bourses higher.
March 17, 2004: 2:02 PM EST
LONDON (Reuters) - European stocks rallied Wednesday to a five-day peak as strong earnings, corporate investment plans and a friendly U.S. Federal Reserve overcame global economic and security fears.
Technology stocks were perky amid bullish statements at the CeBIT trade fair in Germany, where U.S. telecoms equipment maker Lucent (LU: Research, Estimates) announced it had won new contracts worth $300 million, a sign that companies are spending again.
French rival Alcatel leapt 4.5 as Nomura upgraded it to "buy" from "neutral" and the world's top mobile handset maker Nokia rose 2.2 percent after it launched a new camera phone to keep up with demand.
Europe's top software maker SAP added to confidence in the sector. SAP's board approved a 33 percent dividend increase and sent its stock up 2.3 percent.
The FTSE Eurotop 300 index of pan-European blue chips ended up 1.4 percent at 989.7, the highest since the Madrid bombings, after hitting a two-month low of 963.9 Tuesday. In good volumes, gainers outweighed losers by a ratio of five to one.
The narrower DJ Euro Stoxx 50 index rose 1.7 percent to 2,821.80 points.
"Weak labor market data in the United States and the terrorism in Spain gave markets a reason to correct," said Bernd Meyer, equity strategist at Deutsche Bank.
"Equities are not expensive. Good first-quarter trading updates and results will help the market stabilize and probably reach new highs over the next three months."
Markets around the world were relieved that the U.S. Federal Reserve promised to be "patient," a word taken to mean U.S. interest rates would remain at 46 year lows of one percent until jobs growth showed signs of strong recovery.
Jobs growth in the United States -- key to the long-term health of the U.S. economy -- has been worrying the market ever since the weak February non-farm payrolls March 5.
"It's still an open question, but if employment in the United States bounces then we should see another wave of cyclical outperformance," said a fund manager. "Technology stocks are up, but we think they are already expensive."
Leisure and travel shares recovered from last week's trouncing after the deadly bombs in Madrid, with London-listed Hilton Group up 2.2 percent and France's Accor up 1.1 percent.
Air France added 2.3 percent and Spain's Iberia soared 5.0 percent on speculation it may be bid for by British Airways, which rose 3.6 percent.
Spain's benchmark index outdid most European benchmarks as it climbed 1.8 percent helped by gains of between 2.2 and 3.1 percent in banks BBVA and Santander Central Hispano and telecoms group Telefonica.
Across Europe, London's FTSE closed up 0.6, Paris's CAC and Frankfurt's Dax each climbed 1.9 percent and Zurich's SMI ended up 0.7 percent.
Munich Re rose 4.1 percent on news of strong profits in its main reinsurance business and its forecast that performance would improve further this year, despite 2003 losses -- the first since the San Francisco earthquake in 1906.
French outdoor advertising company JCDecaux was also a star performer. It leapt 9.1 percent on a 57 percent jump in 2003 net income and a prediction that turnover growth would accelerate in 2004.
Banks generally were strong after Bear Stearns (BSC: Research, Estimates) reported record earnings, following in the footsteps of Wall Street rival Lehman Brothers (LEH: Research, Estimates) Tuesday.
Strong banking earnings also helped buoy global news and information provider Reuters Group, which counts investment banks among its top customers. Reuters shares ended up 6.1 percent.
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