Euro Stocks End Higher, Banks Recover
European stocks closed slightly higher Tuesday, but were off their earlier highs after a rally in banking stocks lost momentum in the run-up to the market close. Firm earnings from Barclays counterbalanced concerns over a writedown from Credit Suisse and kept the overall sector from sinking.
U.S. stocks were higher, but also lacked their earlier drive, after the world's biggest retailer Wal-Mart's profit beat market expectations.
Shares of Credit Suisse slumped 6.6 percent following a delayed start to trading after it said it discovered errors amounting to $2.85 billion in the valuation of certain asset-back positions. Repricing will wipe off $1 billion from its net income, the company said, adding it will remain profitable in the first quarter.
"Investors are still shying away from (from banks). A lot of people will want to see much more sustainable gains before they think the corner has really been turned," David Jones, chief market analyst at IG Index, told "European Closing Bell."
Barclays also disclosed a writedown, but shares surged 3.7 percent higher after it reported profit broadly in line with market expectations and raised its dividend. Shares had been lower in early trade as the UK bank raised the amount of its 2007 writedowns to $3.1 billion.
Looking to earnings, Danish brewer Carlsbergbeat forecasts for full-year operating profit and said it has secured financing for its takeover bid for Scottish & Newcastle with Heineken. Shares of Carlsberg rose 2.1 percent.
Takeover prospect S&N, which has agreed to be taken over by its rival brewers, said its 2007 pretax profit was unchanged and that it would not be paying a dividend because of the takeover.
Confectionary company Cadbury Schweppes posted a 2-percent fall in full-year profit, but remained confident it would take the momentum seen in the first quarter through the remainder of 2008. The stock was the worst performer on the FTSE-100 index, shedding 5.4 percent.
Also missing full-year earnings expectations was fragrance maker Givaudan, which was affected by larger-than-expected costs linked to its acquisition of Quest.
Meanwhile shares in Corporate Express catapulted 39 percent after the Dutch company received a7.25 euros per share cash offer from U.S. office goods supplier Staples .
In the energy markets, oil and basic resource stocks gained as the price of crude jumped above $98, due to supply concerns.