By Carla Mozee, MarketWatch
Vivendi, Mediaset tussle continues; Volkswagen reaches U.S.
dealer agreement
European stocks swung higher Friday, with investors taking
remarks from Federal Reserve Chairwoman Janet Yellen as a sign of
confidence in economic growth world-wide.
The Stoxx Europe 600 closed up 0.5% at 343.72, but it had been
creeping up shortly before the text of Yellen's speech in Jackson
Hole, Wyo., was released. All but the consumer-services sector
ended higher.
Yellen, at the Fed's summer summit, signaled that the U.S.
central bank is preparing to increase interest rates as soon as
next month.
"In light of the continued solid performance of the labor market
and our outlook for economic activity and inflation, I believe the
case for an increase in the federal-funds rate has strengthened in
recent months," she said.
From the European markets perspective, "if the Fed starts to
hike interest rates, it shows that there is at least some sustained
and sustainable economic growth in what is the world's largest
economy," said Richard Hunter, head of research at Wilson King
Investment Management.
That "should have a positive effect on other economies because
the chase for economic growth is the big conundrum at the moment,"
he said.
Read:The head of Germany's Deutsche Bank says negative rates are
'fatal'
(http://www.marketwatch.com/story/the-head-of-germanys-largest-bank-says-negative-rates-are-fatal-2016-08-25)
Stocks in Germany, Europe's largest economy, closed higher,
leaving the DAX 30 up 0.6% at 10,587.77. France's CAC 40 closed up
0.8% at 4,441.87.
The euro fell against the dollar, exchanging hands at $1.1223,
down from $1.1281 late Thursday in New York.
The Stoxx 600 closed 1.1% higher for the week. That followed
last week's pullback of 1.7%.
Fund-tracker EPFR on Friday said more than $2 billion flowed out
of European equity funds in the week ended Wednesday. That marked
the 29th consecutive weekly outflow, extending the longest
redemption streak on record.
Vivendi tussle: In focus Friday was Vivendi SA (VIV.FR), whose
shares slumped 1.7%. The media company's second-quarter adjusted
earnings fell 3.1% to 187 million euros ($211 million), missing
analyst expectations. Vivendi said it's cutting EUR300 million in
costs from its pay-TV unit Canal Plus.
At the same time, shares of Mediaset SpA (MS.MI) fell 0.5% after
Vivendi, which has been seeking to amend an agreement with Mediaset
(http://www.marketwatch.com/story/vivendi-plans-costs-cuts-at-tv-unit-2016-08-26)
to buy its pay-TV business, said Thursday the contract could become
void Sept. 30. Mediaset reiterated that the contract is binding and
that it remains unwilling to change the terms of the deal.
Other movers: Gemalto NV (GTO.AE) shares surged 6.5% after the
SIM card maker's quarterly results came in above expectations.
Volkswagen AG (VOW.XE) picked up 2.2% after the German auto
maker reached an agreement with about 650 U.S. franchise dealers
(http://www.marketwatch.com/story/vw-strikes-deal-with-us-franchise-dealers-2016-08-26)
affected by the company's diesel-emissions scandal. A Sept. 30
deadline was set to complete the details.
Amec Foster Wheeler PLC (AMFW.LN) shares leapt 6.6% after Morgan
Stanley upgraded the energy engineering company to overweight from
equalweight.
BAE Systems PLC (BA.LN) rose 2.3% after the defense company's
rating was upgraded to buy from hold at Berenberg.
Indexes: Italy's FTSE MIB ended up 0.8% at 16,843.99, and
Spain's IBEX 30 picked up 0.7% at 8,659.50.
In London, the FTSE 100 closed up 0.3% at 6,838.05
(http://www.marketwatch.com/story/ftse-100-slips-but-miners-find-relief-after-selloff-2016-08-26),
but ended the week lower by 0.3%.
Data:Lending to eurozone firms increased
(http://www.marketwatch.com/story/ecb-data-show-rise-in-eurozone-lending-to-firms-2016-08-26)
at a faster yearly pace in July than in the previous month,
European Central Bank data showed, potentially reducing the need
for further monetary stimulus.
Consumer confidence in France rose to 97 in August from 96 in
July
(http://www.marketwatch.com/story/french-consumer-confidence-ticks-up-in-august-2016-08-26),
while economists had expected no improvement, Insee said Friday. In
addition, France's gross domestic product stalled in the second
quarter, according to a second print from the statistics agency.
The economy expanded by 0.7% in the first quarter.
GFK said German consumer sentiment is expected to improve
(http://www.marketwatch.com/story/german-consumer-confidence-set-to-rise-gfk-2016-08-26)
in September, and that could mark short-lived concerns about the
impact of Brexit on Europe's largest economy.
(END) Dow Jones Newswires
August 26, 2016 12:25 ET (16:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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