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European stocks rose for a sixth day, the longest winning streak this year, as services output shrank at a slower pace than initially forecast, outweighing worse-than-estimated earnings from HSBC Holdings Plc.
Euro-area services output shrank at a slower pace than initially estimated in July, adding to evidence the economy is gathering strength to pull out of a record-long recession. An index of activity in the services industry based on a survey of purchasing managers rose to 49.8 from 48.3 in June, London-based Markit Economics said. That’s above an initial estimate of 49.6 on July 24. A reading below 50 indicates contraction.
A measure of U.K. services growth climbed more than forecast to the highest level in more than six years.
The Institute for Supply Management’s index of U.S. non-manufacturing businesses rose to 56 in July from the prior month’s 52.2, a report from the Tempe, Arizona-based group showed today. The median forecast in a survey of economists called for a gain to 53.1.
National benchmark indexes increased in 11 of the 17 western European markets open today. France’s CAC 40 climbed 0.1 percent, while Germany’s DAX slid 0.1 percent and the U.K.’s FTSE 100 dropped 0.4 percent. The Icelandic exchange was closed for a holiday.
Lloyds jumped 2.7 percent to 75.69 pence, the highest price since October 2010. Chief Executive Officer Antonio Horta-Osorio said during investor presentations that he plans to pay 60 percent to 70 percent of earnings as dividends by 2015, according to a report by the Financial Times, which cited unidentified people involved in the meetings.
Mediaset rose 4 percent to 3.43 euros. Deutsche Bank AG analyst Laurie Davison upgraded the broadcaster controlled by Silvio Berlusconi to buy from hold, saying pullbacks in the share price offer attractive entry points.
Drax added 2.9 percent to 672.5 pence, the highest since October 2008. Goldman Sachs Group Inc. analyst Andrew Mead lifted his rating on the U.K. utility to conviction buy from neutral, citing the company’s transformation from a coal-fired power plant to a mostly biomass-fueled facility.
HSBC slid 4.4 percent to 721.7 pence, the largest drop since November 2011. First-half net income rose 10 percent to $10.28 billion after U.S. loan impairments fell, the London-based lender said. That was below the $10.57 billion estimate of analysts.
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