MarketWatch | Europe Market at Close Report (January 24, 2013).: Upbeat PMIs boost Europe stocks, Nokia slumps

By Sara Sjolin, MarketWatch 

LONDON (MarketWatch) — European stocks ended mostly higher on Thursday, as upbeat global factory data encouraged investors to take on more risk, offsetting disappointing earnings from Apple Inc. 

The Stoxx Europe 600 index XX:SXXP +0.23% gained 0.2% to close at 288.89, the highest closing level since February 2011. 

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Weighing on the index, however, shares of Nokia Corp. FI:NOK1V -5.50% NOK -6.03% slumped 5.5% after the Finnish handset maker said it swung to a profit of 5 euro cents a share in the fourth quarter, beating consensus earnings of 2 euro cents a share. Sales, however, fell 20% to 8.041 billion euros, falling short of estimates. The company also scrapped its dividends for 2012. Read: Nokia swings to profit, misses sales forecasts . 

Frances Hudson, global thematic strategist at Standard Life Investments, said that the overall trading mood remained directionless as “the clues we‘re getting have not been terribly helpful and are not conclusive in one direction or the other.” 

“From a macro point of view we’re in glass-half-full mode. We got better PMIs and people are taking that as a positive. But even when the data has not been terribly supportive, like the Japanese trade data, there’s a feeling that the market is willing to be quite optimistic,” she said. 

But market participants were also preoccupied with the earnings season in the U.S., where a disappointing earnings report from Apple AAPL -10.49% weighed on the broader risk sentiment globally early in the trading day, sending both Asian and European markets lower. See: Apple shares tumble on results, forecast . 

”We’ve seen other less impressive results and it’s clear that it’s still a difficult business environment. Apple was a trigger to see that,” Hudson said.

Apple is the most valuable company in the world, “but to maintain that leadership you need to keep innovating and have the next new product waiting and we don’t know what that next new product is,” she said. 

U.S. markets had closed in positive territory on Wednesday, after the Republican-controlled House of Representatives approved a suspension of the debt ceiling until May 19. See: House OK'S short-term debt-limit extension . 

On the data front in the U.S. on Thursday, the preliminary reading of the manufacturing purchasing managers' index rose to a 56.1 reading in January from 54.0 in December, marking a 22-month high. See: Jan. U.S. flash manufacturing PMI at 22-month high . 

Meanwhile, initial jobless claims dropped by 5,000 to 330,000 and remained at a five-year low. See: U.S. jobless claims drop 5,000 to 330,000 . 

The leading economic index also showed positive trends, rising 0.5% in December, above analysts’ estimates of a 0.4% gain. See: Economic indicators rise in December . 

The upbeat data helped lift U.S. stock markets, with the S&P 500 index SPX +0.27% briefly topping 1,500. See: Stocks rise on data; Apple trips circuit breaker . 

Movers

Among notable movers in Europe, shares of Logitech International SA CH:LOGN -9.58% sank 9.6%, after the computer-equipment firm said it swung to a net loss of $195 million in the third fiscal quarter compared with a profit of $55 million the year-ago period. 

On a more upbeat note, U.K. mining firms showed upbeat moves, after HSBC’s so-called “flash” Chinese manufacturing Purchasing Managers’ Index for January climbed to a 24-month high of 51.9, indicating activity in China’s factory sector continued to accelerate. See: China factory activity improves further in January .

Reuters Enlarge Image

Factory activity in China improved further in January, a report said Thursday.

Shares of Anglo American PLC UK:AAL +1.36% gained 1.4%, while heavyweight Rio Tinto PLC UK:RIO +2.11% RIO +1.39% AU:RIO -0.24% put on 2.1%. 

That helped the FTSE 100 index UK:UKX +1.09% close 1.1% higher at 6,264.91. See: Miners lift London after upbeat China data .

Shares of wireless-telecom firm Vodafone Group PLC UK:VOD +3.18% VOD +2.57% also added to the positive mood in London, rising 3.2%. Widely followed hedge fund manager David Einhorn said in a letter to investors late Wednesday that he had increased his Vodafone holdings, arguing that the market was undervaluing the company’s stake in Verizon Wireless. See: Einhorn's poor fourth quarter hits annual returns . 

The broader market trimmed opening losses after the Markit composite purchasing-managers’ index for the euro zone signaled the economic downturn in the region eased in January. The index rose to 48.2 from a December reading of 47.2, beating expectations of a 47.6 print. A reading below 50 signals contraction. See: Euro-zone PMI signals downturn eased in January . 

France’s CAC 40 index FR:PX1 +0.70% picked up 0.7% to 3,752.17, after trading as low as 3,711.55 earlier in the session. 

Shares of LVMH Moët Hennessy Louis Vuitton FR:MC +0.87% gained 0.9% to 139.60 euros ($186.38). J.P. Morgan Cazenove raised the luxury-goods maker’s price target to €142 from €132 previously. 

Outside the main index in Paris, shares of CGG Veritas FR:GA -2.02% slumped 2%, after Goldman Sachs cut the oil-services firm to sell from neutral.

Germany’s DAX 30 index DX:DAX +0.53% put on 0.5% to 7,748.13, up from an intraday low of 7,661.96. 

Shares of Commerzbank AG DE:CBK +2.22% gained 1.5%, as the bank confirmed plans to cut between 4,000 and 6,000 jobs. See: Commerzbank confirms plans to cut 4,000-6,000 jobs . 

Sara Sjolin is a MarketWatch reporter based in London. Follow her on Twitter @sarasjolin.