By KEN SWEET
NEW YORK (AP) â¿¿ It's time for U.S. investors to revisit Europe.
Last summer, much of the continent was mired in recession and the euro currency looked like a failed experiment.
Now, Europe is healing. The 17 countries that use the euro posted economic growth of 0.3 percent from April to June compared with the previous quarter, the first expansion since late 2011. Industrial production is up, consumer spending is stable and stock markets are rising as people and businesses gain confidence.
Fund managers and market strategists say the last several months of better economic news and higher stock prices could signal the start a long-term rally for the continent.
"There are now clear signs that Europe is turning," says Jurrien Timmer, a portfolio manager at Fidelity Investments. Timmer recommends that investors move part of their U.S. investments into Europe.
In France, the CAC 40 stock index has risen 12 percent this year. Germany's DAX index is up 11 percent. Even more troubled economies like Spain and Italy aren't discouraging investors: Italy's FTSE MIB has climbed 7 percent and Spain's IBEX is up 6 percent.
European stocks appear to be less expensive than their U.S. counterparts, based on their price-earnings ratio, or P/E. Low P/Es signal that stocks are cheap relative to their earnings; high ones signal they are expensive.
The Stoxx Euro 600, Europe's equivalent of the Standard & Poor's 500 index, is trading at 13.1 times earnings over the next 12 months. That is slightly cheaper than the 14.1 times for the S&P 500.
Europe's nascent recovery can be traced back to a year ago. On July 26, 2012, European Central Bank President Mario Draghi pledged to do "whatever it takes" to save the currency union. Later, the ECB calmed fears of state bankruptcies in countries like Spain and Italy by promising to buy back government debt, if needed.