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European stocks rebounded from the biggest drop in a month amid concern recent losses are overdone considering the outlook for company earnings.
Stocks rose today even as a report showed European services and manufacturing output contracted more than economists forecast in May. A composite index based on a survey of purchasing managers in both industries fell to 45.9 from 46.7 in April, London-based Markit Economics said. Economists had forecast a drop to 46.6, the median of 14 estimates in a Bloomberg survey showed. A reading below 50 indicates contraction.
German business confidence also declined more than forecast in May. The Munich-based Ifo institute said today its business- climate index, based on a survey of 7,000 executives, slipped to 106.9 from 109.9 in April. Economists had forecast a reading of 109.4.
National benchmark indexes rose in all the western European markets today, except for Iceland and Greece. The U.K.’s FTSE 100 rallied 1.6 percent, Germany’s DAX advanced 0.5 percent and France’s CAC 40 gained 1.2 percent. The Greek ASE Index plunged 4.5 percent to the
Banco Bilbao Vizcaya Argentaria SA (BBVA) rose 2.5 percent to 4.93 euros. Spain’s second-largest lender will take non-binding bids for five portfolios of homes, non-performing loans and consumer loans until May 29, two people with knowledge of the matter said. A spokesman for BBVA declined to comment or disclose the nominal value of the portfolios.
Cable & Wireless Communications jumped 18 percent to 33.01 pence, the biggest gain since 2003. The U.K. based mobile-phone network operator reported earnings before interest, taxes, depreciation and amortization of $901 million, beating analysts’ estimates of $884.5 million, and said it expects similar levels through 2012 and 2013.
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