European Stocks Jump After Fed Minutes Spur Low Rate Bets

By Sofia Horta e Costa

European stocks rallied, rebounding from a two-month low, on speculation that the Federal Reserve will keep interest rates near zero amid concerns about slower global growth. U.S. index futures were little changed, while Asian shares rose.
Norsk Hydro ASA climbed 3.7 percent after U.S. peer Alcoa Inc. reported its highest earnings in three years. Solvay SA rose 2.8 percent after confirming its profit-growth target for 2014. Red Electrica Corp. SA added 1.4 percent as HSBC Holdings Plc raised its rating on the stock. Suedzucker AG declined 1.1 percent after the sugar producer said third-quarter operating profit will be “sharply lower” than last year.
The Stoxx Europe 600 Index gained 1 percent to 331.41 at 8:07 a.m. in London. The gauge had slumped 2.4 percent in the
previous two days as the International Monetary Fund cut its forecasts for global growth and data showed German industrial production contracted the most in more than five years.
Europe’s equity gauge has lost 5.3 percent since reaching its highest level in more than six years in June. Standard & Poor’s 500 Index futures added less than 0.1 percent today, while the MSCI Asia Pacific Index jumped 0.6 percent.
Minutes from the Fed’s Sept 16-17 meeting showed a number of policy makers said U.S. growth “might be slower than they expected if foreign economic growth came in weaker than anticipated.” Officials renewed their pledge in September to keep interest rates near zero for a “considerable time” after ending bond purchases as early as this month. The benchmark federal funds rate has been in a range of zero to 0.25 percent since December 2008.

U.S. Jobless

Labor Department data at 8:30 a.m. in Washington may show the number of Americans who filed applications for unemployment benefits rose to 295,000 last week from 287,000 the previous period, economists projected.
In the U.K., the Bank of England will probably leave its official bank rate and asset purchase target unchanged, economists projected before the decision at noon in London.
Norsk Hydro, the Norwegian aluminum producer that reports third-quarter earnings on Oct. 22, rose 3.7 percent to 34.50 kroner. Alcoa, the largest U.S. maker of the metal, late yesterday posted profit and sales that beat analysts’ estimates.
Solvay climbed 2.8 percent to 116.35 euros. The Belgian chemical maker restated its results for 2013 and the first six months of 2014 to take into account the sale of its sulfuric-acid unit Eco Services. Solvay said profit will grow in the high single-digit percentage points.

Hays Advances

Hays Plc added 5.5 percent to 124.7 pence. The British professional-recruitment agency reported a 4 percent increase in net fees for the first quarter, led by the U.K. and Ireland.
Red Electrica rose 1.4 percent to 66.94 euros after HSBC upgraded its rating on the operator of Spain’s power-transmission network to neutral from the equivalent of sell. The shares have jumped 38 percent so far in 2014, the best performance among all utilities on the Stoxx 600.
Suedzucker fell 1.1 percent to 11.62 euros after the company also reported a 73 percent decline in second-quarter operating profit. Suedzucker said that reaching its target for annual profit of 200 million euros ($255 million) has become more difficult because of weaker sugar and ethanol markets in Europe.