European stocks rise for a third day

Wed, Oct 17, 2012, 01:00

European stocks rose for a third day as Moody's Investors Service kept its investment-grade debt rating on Spain and traders awaited a report that may show American home construction climbed.

Asian shares rallied, while US index futures were little changed.

ASML dropped 2.7 per cent as Europe's biggest semiconductor-equipment maker forecast fourth-quarter sales that trailed projections.

Danone sank the most in four months as the food company reported revenue growth that missed analysts' estimates.

PSA Peugeot Citroen advanced 2.7 per cent as Le Figaro said the French government and banks may bail out the automaker's credit unit.

The Stoxx Europe 600 Index rose 0.2 per cent to 275.03 at 12.04pm in London, the highest level in three weeks.

The gauge has rallied 18 per cent from its 2012 low on June 4 as European Central Bank policy makers agreed on an unlimited bond-buying programme and the Federal Reserve unveiled a third round of quantitative easing.

"There appears to be positive news regarding Spain," said Jakup Petur Baerentsen, a chief equity adviser at Nordea Private Bank in Copenhagen.

"The market has consolidated and we think that it will continue upwards."

Standard and Poor's 500 Index futures advanced 0.1 per cent and the MSCI Asia Pacific Index gained 1 per cent.

Moody's kept an investment-grade credit rating on Spain late yesterday, citing a reduction in the risk of losing market access because of the ECB's willingness to buy the nation's debt.

Moody's assigned a negative outlook on the country's Baa3 sovereign debt, one step above junk, as it concluded the review for a possible further downgrade of its rating that it had initiated in June.

Spain avoided joining Cyprus, Portugal, Ireland and Greece in being rated below investment grade.

S&P has a negative outlook on its BBB- rating, also one step above junk, and Fitch Ratings has Spain at BBB, two levels higher than junk.


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