Europe boosted by media, autos
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LONDON, England (Reuters) -- European stocks closed at their highest levels in 17 months on Wednesday after U.S. Federal Reserve Chairman Alan Greenspan signaled the U.S. economy would grow strongly but that interest rates were on hold for now.
The media sector was the best performer as Vivendi Universal jumped on news U.S. cable television operator Comcast made an
audacious bid to buy Walt Disney for more than $54 billion to create the largest media company by revenue.
Vivendi shares initially rose 4.4 percent to their highest since July 2002. They ended up 1.7 percent and boosted other stocks in the sector, which ended up 1.26 percent.
German broadcaster ProSieben ended up 2.3 percent, British television group ITV added 3.1 percent and music group EMI jumped 5.9 percent.
"We'll need earnings to drive prices now, but M&A is coming back at the global level and that's a good sign,'' said Michaela Marcussen, associate director at SG Asset Management.
Investors also made a beeline for auto makers after Peugeot's results topped forecasts and its shares closed up 4.1 percent.
Peugeot's results boosted sentiment for the sector, recently weighed by worries that the euro's rise against the dollar would damage European car exports to the United States.
French peer Renault added 1.1 percent and Germany's BMW and Volkswagen gained around one percent.
Fed balm
The FTSE Eurotop 300 index of pan-European blue chips ended up 0.12 percent at 996.02, the highest close since August 27,
2002, but below the session high of 999.29. Amid good volumes, the ratio of winners to losers was some three to one.
The DJ Euro Stoxx 50 index gained 0.34 percent to 2,890.80 points.
Greenspan, in a speech to Congress on monetary policy, calmed worries that the U.S. Federal Reserve would derail economic and earnings growth by raising interest rates too soon.
"He was upbeat about growth, not worried about inflation, and has only nudged down unemployment forecasts,'' said Kevin Grice, economist at American Express. "The market is taking it that the hike will be later rather than sooner.''
In New York, the blue-chip Dow Jones industrial average was up 0.7 percent at 10,668.0 points and the technology-heavy
Nasdaq Composite Index was up 0.3 percent at 2,081.59.
Across Europe, Britain's FTSE was down 0.20 percent at 4,396.0 points, the Swiss SMI was little changed at 5,882.1,
France's CAC rose 0.26 percent to 3,677.85 and Germany's DAX added 0.28 percent to 4,122.16.
Telecom firms came under pressure after the Nordic region's biggest operator TeliaSonera undermined confidence after failing to meet expectations for fourth-quarter profits and for its dividend, sending it down nearly six percent.
Blue-chip decliners also included AstraZeneca with losses of 2.3 percent on news that Sweden's Investor sold about a billion dollars worth of shares in Europe's second-largest drugmaker to reduce its debt burden.
But Lundbeck shrugged off the gloom among drug companies with gains of 4.9 percent after Morgan Stanley raised its earnings forecasts for the Danish drugs firm.
On Tuesday, U.S. drugmaker Merck said it planned to license a sleep disorder drug from Lundbeck.
Meanwhile, Norsk Hydro ended up 3.3 percent after Norway reiterated opposition to a possible tie-up between the oil and
gas group and domestic rival Statoil and news that merger talks between the two had failed.
Europe's biggest defense firm BAE ended up 2.8 percent after Merrill Lynch upgraded it to "buy'' from "neutral,'' saying BAE's
discount to its industry peers was now excessive.
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Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
