Europe Stocks Rise on Earnings as Dollar Strengthens; Gold Falls

 Stocks in Europe and Asia rose amid better-than-estimated corporate earnings. The dollar gained for a second day after the Federal Reserve said the job market is improving, while gold slumped.

The Stoxx Europe 600 Index increased 0.5 percent by 8:21 a.m. in London. The MSCI Asia Pacific Index added 0.3 percent, paced by Nintendo Co. after the Japanese gaming company returned to a profit. The dollar gained 0.2 percent versus both the euro and the yen. Standard & Poor’s 500 Index index futures slipped 0.1 percent after U.S. stocks climbed Wednesday. Gold retreated 1 percent.

With Europe’s earnings season in full swing, companies from Nokia Oyj to Deutsche Bank AG exceeded investor expectations. Traders will get another chance to speculate on the timing of U.S. interest-rate increases with an update on second-quarter gross domestic product due Thursday. More than 500 companies in Japan’s Topix index report first-quarter earnings on Thursday and Friday.

Nokia surged 7.4 percent, while Deutsche Bank gained 2.4 percent. Siemens AG, Europe’s largest engineering company, rose 3.2 percent after quarterly earnings beat estimates.

The Topix rose a second day as the yen traded at a one-week low versus the dollar. Of the companies on the index that have already posted results, and for which Bloomberg has estimates, 59 percent beat analysts’ profit expectations. Japan’s industrial production increased more than forecast in June, aiding an economy that struggled last quarter with weakness in retail sales and exports.

‘Further Improvement’

Australia’s S&P/ASX 200 Index climbed 0.8 percent. South Korea’s Kospi index fell 0.9 percent amid a 3.8 percent retreat by Samsung Electronics Co. after second-quarter profit missed analysts’ estimates.

The Federal Reserve on Wednesday dropped the modifier “somewhat” in describing a decline in labor-market slack, and said it will tighten policy once it sees “some further improvement in the labor market.”

The addition of the word “some” to this sentence is a strong indicator the U.S. is inching closer toward its first rate increase since 2006, Alan Ruskin, global head of Group of 10 foreign exchange at Deutsche Bank AG, said in an e-mail.

Fed Chair Janet Yellen is guiding the central bank toward its first rate increase in almost a decade as the U.S. approaches full employment. She’s said the Fed is likely to tighten policy this year should the economy continue to improve in line with her expectations. Economists have put the chance of a September increase at 50 percent.

Goldman Positive

The Bloomberg Dollar Spot Index, which tracks the greenback against 10 major peers, rose 0.2 percent, extending Wednesday’s 0.3 percent advance. Treasuries slipped a third day, with 10-year yields up two basis points, or 0.02 percentage point, to 2.31 percent.

Goldman Sachs Group Inc. Chief Executive Officer Lloyd C. Blankfein said Wednesday U.S. markets are poised for prolonged growth, and will quickly move on after the jolt that should result from the Fed’s rate increase.

The Bloomberg Commodity Index of 22 raw materials fell 0.1 percent, poised for its largest monthly loss since 2011. West Texas Intermediate headed for its biggest monthly drop this year. WTI was little changed at $48.78 a barrel, while Brent crude increased 0.3 percent. Copper declined 0.6 percent to $5,295 a metric ton.

Bloomberg.com