European stocks gain on US corporate news

The London FTSE 100 Index added 0.90 per cent to reach 5154.64 while in Paris the CAC 40 rose 1.34 per cent to 3806.81. The Frankfurt DAX also gained 1.34 per cent to reach 5716.54.

Elsewhere there were gains of 0.79 per cent in Madrid, 1.40 per cent in Brussels, 0.73 per cent on the Swiss Market Index, 1.07 per cent in Milan and 1.79 per cent in Amsterdam.

US shares also forged higher as the market was energised by an earnings report from aluminum maker Alcoa showing a surprise return to profits.

The Alcoa report, the first from a blue-chip firm for the third quarter, offered hope that companies are regaining health as the economy improves.

The Dow Jones Industrial Average at mid-day had risen 1.04 per cent to 9827.15 while the tech-heavy Nasdaq advanced 1.00 per cent to 2126.35.

Patrick O'Hare at Briefing.com said Alcoa's report late Wednesday "ceremoniously kicked off the third quarter reporting period. At the same time, it kicked more than a few short sellers in the mouth as the aluminum maker said mostly all the right things."

The company said its net income was $77 million or eight cents a share in the quarter ended September, after three losing quarters.

O'Hare said Alcoa also offered an upbeat outlook for aluminum consumption, another sign of an improving global economy.

The market was also encouraged by news that initial claims for US jobless benefits in the week ended October 3 fell to a nine-month low of 521,000, another encouraging sign.

The report "reaffirms that labour market conditions are improving," said Michael Bratus at Moody's Economy.com.

Among stocks in focus, Alcoa rallied 3.31 per cent to $US14.67, extending its rally of more than 10 per cent this week.

PepsiCo, which also reported earnings, fell 1.67 per cent to $US60.15 after the beverage and snacks maker reported a better-than-expected profit of $US1.72 billion but said it is "still feeling the pinch of the global recession."

In London mining companies were among the day's big winners on the back of rising commodity prices. Vedanta gained 4.04 pencent to reach 2.190 pence.

The auto sector led the way in Paris, with Peugeot adding 4.68 per cent to end the session at 21.585 euros while rival Renault gained 3.897 per cent to close at 33.625 euros.

In Frankfurt steel makers ThyssenKrupp and Salzgitter drew strength from the Alcoa results, the former adding 4.04 per cent to 23.96 euros and the latter 2.71 per cent to 68.30 euros.

Earlier in the day in Asia Tokyo's benchmark Nikkei-225 Index closed up 0.34 per cent to 9832.47 points on Thursday after the strong yen took some of the shine off the positive lead overnight from Wall Street.

AFP