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European Stocks Advance as Investors Await U.S. Payrolls

ECB

European stocks rose, heading for their first weekly rally of the year, as investors awaited data that may show American jobs made the biggest annual gain since 2005. U.S. stock futures and Asian shares were little changed.

Swatch Group AG added 3.7 percent after disclosing a positive outlook for 2014. Metro AG gained 3.3 percent after a report its biggest shareholder may push for replacing its chief executive officer and selling some units. Norsk Hydro ASA fell after U.S. peer Alcoa Inc. posted earnings below estimates.

The Stoxx Europe 600 Index advanced 0.5 percent to 329.92 at 8:11 a.m. in London. The benchmark gauge has risen 0.7 percent this week as reports on German unemployment U.S. private jobs beat economists’ projections. It jumped 17 percent in 2013. Standard & Poor’s 500 Index futures added 0.2 percent, while the MSCI Asia Pacific Index increased less than 0.1 percent.

“The main event today is the non-farm payrolls report,” Michael Hewson, a market strategist at CMC Markets Plc in London, wrote in a note. “We shouldn’t forget that we could also see significant revisions to the previous two months and they are also quite likely to move the dial.”

The volume of shares changing hands in companies listed on the Stoxx 600 was 34 percent higher than the average of the past 30 days, according to data compiled by Bloomberg.

U.S. Jobs

A Labor Department report at 8:30 a.m. in Washington will probably show U.S. employers hired 197,000 workers in December, following the 203,000 people recruited a month earlier, according to economists in a Bloomberg survey. The projected gain would bring the increase in 2013 to 2.27 million, the biggest annual gain since 2005. Economists also expect the unemployment rate to have stayed at 7 percent in December.

The ADP Research Institute’s figures on Jan. 8 showed U.S. companies added more workers last month than economists forecast.

Swatch climbed 3.7 percent to 570 Swiss francs. The biggest maker of Swiss watches reported 2013 gross sales of 8.82 billion francs ($9.7 billion), compared with the average analyst estimate of 8.86 billion francs.

“Based on the strong start by all brands in the first few days of January, dynamic growth is expected for the entire year 2014,” Swatch said in a statement. “The Group expects good results for 2013 at operating profit and net income level.”

Metro Units

Metro increased 3.3 percent to 35.13 euros. Franz Haniel & Cie. which owns 30 percent of the German retailer, may ask Metro to sell its Real, Kaufhof or Media-Saturn units, Platow Brief reported without citing anyone. Metro chief Olaf Koch opposes the move, Platow said. Haniel CEO Stephan Gemkow may not extend Koch’s contract when it comes up for renewal this year, according to the German newsletter.

Norsk Hydro ASA, an Oslo-based supplier of aluminum and its products, declined 0.8 percent to 27.58 kroner. Alcoa Inc. marked the unofficial start of the U.S. earnings-reporting season yesterday as the largest American aluminum maker reported fourth-quarter profit that missed analysts’ estimates.

Serco Group Plc lost 2.4 percent to 490.8 pence after the U.K.’s National Audit Office said it is among the two companies that may have to repay 3 million pounds to 4 million pounds to the government as they “struggled” with 2012 contracts to house asylum seekers.

(Source: Bloomberg)