European stocks closed in positive territory on the first trading day of the fourth quarter as investors shook off profit warnings from UBS and Citigroup to focus on rising U.S. stocks.
The London FTSE-100, Paris CAC-40 and the Frankfurt DAX were higher. The FTSE CNBC Global 300 was also in the green.
U.S. stocks were buoyed by the prospect of a Federal Reserve rate cut in the wake of weaker-than-expected manufacturing data.
UBS, the world's largest wealth manager, said it would lose 600 million ($513 million) to 800 million Swiss francs and added it would cut 1,500 jobs in its investment bank, including top executive Huw Jenkins.
Shares in UBS closed OVER 3% higher in the afternoon, following a near 3% drop at the open, as investors finally shrugged off the warning, relieved that the bad news was out.
"Clearly, with UBS, they're getting it all out there," Jason Singer, from Wall Street Journal Europe, told "European Closing Bell."
He said that the fact that the Swiss bank had a new CEO contributed to its being able to lay it all out in the open and other banks may need to follow suit. "I think they're sort of setting the standard," he added.
Profit Warnings to Continue
Credit Suisse also said its bottom line was hurt by the credit crunch, but still predicted a profitable quarter. Shares of Credit Suisse closed 1.8% higher.
Profit warnings from banks hit by U.S. subprime-related losses are likely to continue throughout the quarter, Elissa Bayer, director of private clients at Insinger de Beaufort, told "Worldwide Exchange."
Meanwhile, Nokia said it will offer $8.1 billion for U.S. based digital map supplier Navteq in one of its largest takeovers ever, but its shares fell 1.8% as analysts dubbed the deal "expensive."
And the London Stock Exchange Group completed a $2.3 billion acquisition of Borsa Italiana even as takeover talks swirled about the British exchange. LSE shares closed 1.2% up.
On the political front, Britain's Finance Minister Alistair Darling said current transparency regulations make it difficult for central banks to act as the lender of last resort without causing market disturbance, when speaking at the Reuters headquarters in London.