Strong earnings help Europe stocks halt retreat

* FTSEurofirst 300 up 0.7 pct after one-week sell-off

* Forecast-beating results offset lingering macro fears

* Volatility falls from 7-month high hit on Wednesday

* For up-to-the-minute market news, click on [STXNEWS/EU]

By Blaise Robinson

PARIS, Aug 26 (BestGrowthStock) – European stocks were up around
midday on Thursday, halting a one-week drop and tracking a late
rally on Wall Street, as a batch of strong corporate results
offset investors’ worries over economic outlook.

L’Oreal (OREP.PA: ) surged 6.4 percent after the cosmetics
major posted better-than-expected results, lifted by cost cuts
and an upturn in consumer spending, while Credit Agricole
(CAGR.PA: ) gained 2.8 percent after reporting forecast-beating
profits and revenue.

By 1044 GMT, the FTSEurofirst 300 (.FTEU3: ) index of top
European shares was up 0.7 percent at 1,018.44 points. The
benchmark index had lost nearly 4 percent in the week, hitting a
five-week low on Wednesday, hurt by a raft of grim U.S. macro
data that fuelled fears of a double-dip recession.

The Euro STOXX 50 (.STOXX50E: ) was up 0.6 percent at 2,602.94
points. The euro zone’s blue chip index managed to close off the
session’s low on Wednesday and just above a key retracement
level, the 23.6 percent Fibonacci retracement from the index’s
fall from an April high to a May low, a positive sign in the
short term.

“We’re still yo-yoing in a range in this very technical
market where indices move back and forth from support levels to
resistance levels,” said Jacques Henry, analyst at Louis Capital
Markets, in Paris.

“The big focus remains on the macro, and on this front the
newsflow is quite negative so I don’t see a big rebound in the
coming days. There is just no conviction.”

Thursday’s rise came on the heels of a late rally on Wall
Street, where bargain hunters started to scoop up shares after
major indices ran into strong technical support following a
sharp four-day losing streak.

But trading volumes remained anaemic in Europe on Thursday,
signalling a lack of real appetite for stocks despite the day’s
tentative rally.

“Despite the positive signal from the close on Wall Street,
it won’t be enough to reverse the negative bias. We still see
indexes revisiting the year’s lows soon,” said Alexandre Le
Drogoff, technical analyst at Aurel BGC.

The VDAX-NEW volatility index (.V1XI: ), one of Europe’s main
barometers of investor anxiety, inched lower on Thursday after
hitting a seven-week high in the previous session.

The higher the volatility index, based on sell- and
buy-options on Frankfurt’s top-30 stocks (0#.GDAXI: ), the lower
investors’ appetite is for risky assets such as equities.

Investors found some comfort in strong earnings on Thursday,
with Accor (ACCP.PA: ) surging 4.7 percent after the French hotel
group posted a first-half operating profit that more than
doubled, lifted by cost-cutting efforts and improved demand for
hotel rooms.

Mining group Kazakhmys (KAZ.L: ) rose 3.3 percent after
reporting strong results, providing support to mining shares.

The market’s attention will turn to U.S. data later in the
session, with weekly jobless claims due at 1230 GMT. Economists
in a Reuters survey forecast a total of 490,000 new filings
compared with 500,000 in the prior week.

“U.S. jobless claims are likely to be disappointing,” said
David Buik, partner at BGC Partners, in London.

“Companies have been reporting reasonable results but
whether a rally can be sustained is to be seen. There is nothing
to say the bad news is all over.”

(Additional reporting by Joanne Frearson in London; Editing
by Sharon Lindores)

Strong earnings help Europe stocks halt retreat