By Sara Sjolin, MarketWatch
LONDON (MarketWatch) — European stock markets ended a volatile day on a mostly upbeat note on Wednesday, as Unilever PLC and Novartis AG gave some reason for optimism, and investors awaited a key vote on the U.S. debt ceiling.
The Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP -0.10% gained 0.2% to close at 288.22, after trading in tight ranges for most of the session.
Google shares up as profit surges
Shares rose late Tuesday, after the search giant reported a higher fourth-quarter profit on strong online advertising sales. (Photo: AP.)
“There’s certainly a lack of conviction following a very strong start to the year,” said Richard Hunter, head of equities at Hargreaves Lansdown.
“We’re waiting for a positive catalyst and one of the things that could support markets is an improvement in corporate earnings. More positive voices coming of Europe could also help, and a similar positive catalyst could be progress on the debt ceiling in the U.S.,” he said.
Among notable movers in Europe, shares of Alcatel-Lucent posted one of the biggest gains in the pan-European index, up 4.7%, after Citigroup lifted its rating on the telecom-equipment supplier to neutral from sell.
Also among the risers, shares of Unilever PLC /zigman2/quotes/204685760/composite UL +0.38% /zigman2/quotes/205449809/delayed UK:ULVR +0.74% picked up 3.1%, after the consumer-products major reported a 5.4% rise in full-year profit as sales accelerated. See: Unilever warns of 'intense competition'; profit up
In the same vein, shares of Novartis AG /zigman2/quotes/203286410/delayed CH:NOVN +0.14% rallied 4.1%. The Swiss drug maker said profit rose but sales stagnated in the fourth quarter, adding that it expects to return to growth next year. Citigroup also upgraded Novartis to a buy rating from hold. See: Novartis expects return to growth next year
Assessing fourth-quarter results from the U.S. and the U.K. so far, Hunter called it a “mixed picture.”
“Expectations had been marked down, so there is a scope for companies to beat expectations, but analysts are also looking at the actual earnings and management comments. Guidances will be closely watched and we’ll be looking for comments on how companies will start putting their excess cash to work,” he said.
U.S. budget focus
For the broader stock markets, investors trained their attention on the next moves in what have been highly contentious U.S. deficit talks.
The House of Representatives was due to vote on raising the U.S. debt limit through the middle of May, while President Barack Obama was expected to sign such a bill if one is passed by Congress.
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U.S. stocks traded mixed on Wall Street, but with tech stock getting a boost from better-than-expected earnings from Google Inc. /zigman2/quotes/205453964/composite GOOG +1.17% and IBM Corp. /zigman2/quotes/203856914/composite IBM +0.73% issued late the prior day. See: Stocks gain on earnings, debt-ceiling vote
Apple may see its first quarterly earnings decline in 10 years when it reports results after the U.S. market close. See: Apple may see earnings drop, but outlook will be key.