By Barbara Kollmeyer
MADRID (MarketWatch) -- European stocks turned higher on Friday
as U.S. economic data inspired some buying in a market jittery
ahead of next week's Federal Reserve policy meeting, with gains for
BMW and utility stocks in London providing support.
The Stoxx Europe 600 index rose 0.2% to 266.32 points in
afternoon trading.
Investors digested a string of U.S. economic reports. Stocks got
a boost from the release of U.S. GDP data that showed a slightly
faster pace of growth for the third quarter.
Separately, the Chicago PMI in October rose to 60.6 from 60.4,
stronger than the reading of 57 that was expected. Investors
appeared to shrug off another economic report showing a decline in
U.S. consumer sentiment in October.
The bigger focus for markets in Europe and elsewhere remains the
potential for a further round of quantitative easing from the Fed,
which holds a monetary-policy meeting early next week.
Bernard McAlinden, strategist at NCB Stockbrokers, said the
markets have been checking themselves ahead of that meeting. "They
had run ahead on quantitative easing and more recently have been
tempering expectations, and by now they've possibly adjusted," he
said.
In London, the U.K. FTSE 100 index rose 0.3% to 5,691.98, with
shares of utility companies leading on the upside after Scottish
& Southern Energy PLC said it was raising prices for household
gas by 9.4% on Dec. 1.
The news triggered gains across the utility sector with Centrica
PLC up 2.8%, Severn Trent PLC up 2.4% and United Utilities Group up
2.3%.
Shares of British Airways dropped 2.7%. The firm said it
returned to six-month profit, but it was cautious on the outlook
for its business.
"While positive, the economic environment continues to be
subject to uncertainty, to which the increase in APD [air passenger
duty] is unhelpful. We continue to focus on managing our costs,"
the airline said.
Miners, which helped the market break a two-session losing run
on Thursday, were pushing lower on Friday. Shares of Xstrata PLC
fell 1.2% and Rio Tinto PLC (R) lost 1.4%.
Utility shares were also rising in France, with the CAC 40 index
up 0.2% to 3,841.02. Shares of GDF Suez SA rose 1.6% and
Electricite de France SA gained 1%.
Shares of French energy giant Total SA (TOT) fell 0.1%, paring
earlier losses as the firm reported a sharp rise in quarterly
profit, buoyed by higher oil and gas prices.
Germany's DAX 30 index rose 0.2% to 6,591. Shares of BMW AG rose
3% after an upgrade to buy from neutral by Goldman Sachs, which
said it continues to see "significant value" in the auto
sector.
The investment bank cut PSA Peugeot-Citroen SA to sell from
neutral, saying the company faces structural challenges. Shares
fell 0.4% in Paris.
Shares of Daimler AG rose 1.3%, recovering from an earlier fall
after the car maker was downgraded to hold from buy at Societe
Generale.
A leading decliner in Germany was retailer Metro AG . Shares
slumped 2% after HSBC cut it to neutral from overweight, saying the
firm's valuation is now in line with its peers.
In Sweden, shares of tool and machinery maker Sandvik AB fell
nearly 5% after the company missed analysts forecasts for
third-quarter profit.
On the economic front in Germany, data showed retail sales
dropped 2.3% in September from the prior month.