European stocks avoid rout through cuts and innovation

US stocks fluctuated, after a monthly advance pushed benchmark indexes to records, as growth in manufacturing reinforced strength in the American economy while a drop in oil prices weighed on energy companies.

Meanwhile in Europe the reporting season is not turning into the rout investors feared as many of the largest companies managed to navigate weak demand through cost cuts and innovation to deliver earnings in line with or ahead of downbeat forecasts. In Dublin the Iseq finished up 1.3 per cent or 61.86 points at 4,824.99.

DUBLIN

Ryanair

surged 7.66 per cent to €8.18. It lifted its profit forecast for the full financial year to between €750 million and €770 million from its original guidance of €650 million, the airline said yesterday. “This really excited interest in the stock and it had a knock-on upward impact on Aer Lingus,” a Dublin broker said.

Aer Lingus

finished up 3.14 per cent at €1.48.

C&C

regained some its losses in recent sessions, following news of its failed bid for a pubs group, to rise 1 per cent to €3.59. Among other notable movers,

Smurfit Kappa,

which has results this morning, fell back slightly 0.18 per cent to €16.44 and

Paddy Power

finished up 2.58 per cent at €59.70.

LONDON

The FTSE 100 Index closed 58.5 points lower at 6,488 after tentative early gains ebbed away, despite the gains for holiday firms.

British Airways

owner

International Airlines

Group and budget rival

easyJet

were ahead following the bullish update from Ireland’s

Ryanair

.

EasyJet

led the FTSE 100 risers’ board with an increase of nearly 3 per cent, or 40p, to 1540p while

IAG

lifted 5.1p to 414.3p.

Meanwhile state-backed Royal Bank of Scotland dropped 7.8p to 380.2p after a broker note downgraded the lender to sell following the boost to the share price on third-quarter results last week.

The biggest risers on the FTSE 100 Index were easyJet up 40p to 1540p, Petrofac up 20p to 1080p, TUI Travel up 7.4p to 406p and Intercontinental Hotels Group up 36p to 2405p.

The biggest fallers on the FTSE 100 Index were Associated British Foods down 83p to 2671p, Centrica down 7p to 295.5p, Kingfisher down 7p to 295.5p and Standard Life down 8.6p to 385.1p.

EUROPE

Of the fifth of companies in the European Stoxx 600 index that have reported so far, 60 per cent have beaten earnings per share (EPS) expectations, according to

Thomson

Reuters research, compared with just 48 per cent beat in a typical quarter.

Cyclical stocks – whose performance is closely linked to the economic cycle – have delivered better results than forecast after analysts downgraded their expectations in line with growing fears over the state of the economy last month.

“We are not by any means saying we are suddenly seeing a very strong growth environment for cyclicals but it’s just that perhaps the pessimism in estimates going into the number was a little bit too much,” said Dan Ison, head of pan-European equities at Threadneedle Investments.

NEW YORK

The Standard and Poor’s 500 Index was little changed at 2,017.81 by close of trading in New York. The Dow Jones Industrial Average fell 24.28 points, or 0.14 per cent, to 17,366.24. The Nasdaq Composite Index climbed 0.18 per cent to the highest level since March 2000.

AIG, Time Warner, and Walt Disney are among more than 80 S&P 500 companies posting financial results this week. Five out of 10 major industries in the S&P 500 rose, with utilities and technology companies climbing more than 0.5 per cent.

Apple climbed 1.3 per cent to $109.44. The company was holding calls with investors this week to discuss a bond sale, according to a person familiar with the matter Bloomberg said. – Additional reporting Bloomberg, Reuters