Stocks Boosted Despite Lackluster Eurozone GDP Numbers


LONDON -- European equity markets have been seeing a fairly positive session this morning, helped after German GDP data came in better than expected. The numbers from the Federal Statistics Office showed that GDP rose 0.3% from the first quarter, beating analyst estimates of 0.1% to 0.2% growth. This performance from the European powerhouse, along with a stagnant but firm GDP number from France, did little to help Europe as a whole, as the eurozone GDP contracted 0.2% in the latest quarter.

A buoyant session in Asia overnight helped indexes get off to a good start after minutes released from the Bank of Japan showed that several policymakers would be happy to undertake measures to stimulate the economy. Meanwhile, the German GDP numbers have helped the DAX (INDEX: ^GDAXI) rise almost 1% today.

As always, the following price moves are based on this morning's European trading.

The German pharmaceutical sector is seeing strong performance today, led by Merck (NASDAQOTH: MKGAY.PK), which increased its earnings and sales forecasts because of favorable currency movements that reduced its cost base in Europe compared to its revenue streams elsewhere. The company said it expects earnings to hit the top end of expectations for 2012 -- around 2.85 billion euros -- and noted that demand for both old and new products increased in the latest quarter. Merck shares are up 5.3%.

Meanwhile, the German drug wholesaler Celesio (NASDAQOTH: CAKFY.PK) is up 5.2% after it reported first-half profit rising more than expected, thanks to a writedown of units sold and still to be disposed of. The company said first-half operating profit rose to 283.5 million euros from 257.5 million euros last year, while sales increased to 11.25 billion euros from 11.06 billion euros over the same period. The company also reaffirmed its 2012 target.

On the downside, Finnish handset maker Nokia (NYS: NOK) is seeing yet another day of profit-taking, which is pushing shares almost 5% lower after news that it will sell its Qt app-tools unit, bought in 2008 to develop applications for Symbian and MeeGo operating systems, boosted the share performance.

Elsewhere, Swiss wealth manager Julius Baer (NASDAQOTH: JBAXY.PK) is down 3.8% after it agreed to buy Bank of America's Merrill Lynch wealth management units outside the U.S. for 860 million Swiss francs. The estimated total cost of the transaction, including integration costs and incentives to retain bankers, is expected to be somewhere near 1.5 billion francs.

Julius Bayer said the acquisition should boost its assets by 40% and is expected to start adding to earnings from 2015. The company said the cost that it has estimated assumes a transfer of 72 billion francs of client funds over two years -- almost 89% of the assets managed by the Merrill Lynch units.

As always, this morning's European news saw some winners and losers -- and perhaps some European buying opportunities. Indeed, legendary investor Warren Buffett has recently spent more than $1 billion buying the stock of a prominent European large cap. If you want to know why Buffett has bought into Europe, this special Motley Fool report -- "The One European Share Warren Buffett Loves" -- reveals everything, including the price he paid. You can download the report today for free, but hurry -- the report is available for a limited time only.

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