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European markets close higher on earnings; Rolls-Royce surges 10%; Aa down 13%

  • British aircraft engine maker Rolls-Royce Holdings posted a first-half net profit on Tuesday, driven by an uptick in performance from its civil aerospace sector.
  • On the data front, factories in the euro zone started the second half of 2017 with buoyant growth, according to a survey published Tuesday.

European markets closed higher on Tuesday afternoon as investors monitored earnings reports and reacted to further political uncertainty at the White House.

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The pan-European Stoxx 600 was up 0.64 percent with most sectors and major bourses in positive territory. Swiss stock markets were closed due to a national holiday.

Oil and gas stocks were among the top performers, up 1 percent, on better-than-expected earnings news. BP surpassed analyst expectations on Tuesday, despite profits more than halving from the first three months of the year after a hefty charge from an unsuccessful project in Angola. Its shares were 2.6 percent higher.

British aircraft engine maker Rolls-Royce Holdings posted a first-half net profit on Tuesday, driven by an uptick in performance from its civil aerospace sector. Its shares surged to the top of the benchmark on the news, up over 10 percent.

Sticking with British aircraft parts makers, Meggitt reported an increase in organic revenue on Tuesday after the company was supported by currency moves and civil aerospace demand in the first half of the year. However, its underlying profit margin slipped to 18 percent amid development costs. Its shares trimmed all of its losses from early morning deals to close just below 1 percent.

AA Plc fell nearly 13 percent after the company announced that Bob Mackenzie has been removed as chairman of the firm for "gross misconduct." The Automobile Association said nonetheless that it expects its full year performance broadly in line with last year's.

Meanwhile, U.S. markets were significantly higher as the earnings momentum continued. The Dow was near the 22,000 benchmark.

Euro zone manufacturing PMI surges in July

On the data front, factories in the euro zone started the second half of 2017 with buoyant growth, according to a survey published Tuesday. IHS Markit's final manufacturing Purchasing Manager's Index came in at 56.6 in July, just off June's six-year high of 57.4. Any reading above 50 indicates growth.

In the U.S., White House Communications Director Anthony Scaramucci was fired on Monday after fewer than 10 days in the post. The surprise announcement came after a series of turbulent media appearances by the former Wall Street financier, capped off by a profanity-laced tirade to a New Yorker journalist last week.

Meanwhile, staff working in the parlors, maintenance and security departments at the Bank of England began a three-day strike on Tuesday.

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