This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Royal Bank of Scotland, Lloyds, Banks Buoy Mixed European Stocks


LONDON ( The Deal) -- The European markets were mixed this morning, with London pulled up by its banks -- despite some very ambiguous news from that quarter -- and Paris pulled down by poor results from luxury goods heavyweight LVMH (LVMUY). Gloom in Germany over the crisis in Ukraine was in stark contrast to Britain's joy over economic growth, which seemed to eclipse worries that sanctions against Russia could hurt Britain's huge financial services sector -- and possibly also its biggest oil companies.

The U.K. economy grew by 0.8% last quarter according to government figures, meaning it is now officially larger than before the start of the financial crisis. And the International Monetary Fund predicted Thursday that GDP would grow 3.2% for the year as a whole -- faster than any other advanced economy.

Read More: Necessity Forces McDonald's to Stand by China Meat Supplier

Majority state-owned Royal Bank of Scotland (RBS) topped the London leaderboard, rising over 15% at one point before sinking back to 372.2 pence, a still-impressive 13.2% above the previous day's close. The Edinburgh bank reported pretax profits for the six months to the end of June would be £2.65 billion -- that's $4.5 billion -- compared with £1.37 billion in the same period last year. Investors also liked the news that impairment losses on bad loans declined by nearly £1.9 billion during the first half of the year, to £269 million.

What's more, the brighter economic environment has sharply reduced the cost of managing and disposing of the assets pushed off into a bad bank last year.

That's the good news, but the market seemed not to hear Royal Bank's warning that what CEO Ross McEwan said were significant conduct and litigation issues might still weigh on earnings in the future.

What's strange is that partly state-backed Lloyds Banking (LYG) also rose on the general tide of goodwill toward banks. That's despite Lloyds' admission that it is in talks with various government agencies about potential settlements involving fines for manipulating the London interbank rate and other benchmarks. The Financial Times reported these could amount to between £200 million and £300 million.

Meanwhile, in the all-important construction sector, infrastructure and services groups Carillion (CIOIF) and Balfour Beatty (BAFBF) said they were in merger talks to create a £3 billion company. Carrillion was up 10.7% at 372.6 pence, while Balfour Beatty was up 9.04% at 253.3 pence.

And in the media, British Sky Broadcasting (BSYBY), or Sky TV, was down 3.78% at 887 pence, after announcing a deal to pay Rupert Murdoch's 21st Century Fox (FOXA) up to £7.4 billion -- or $12.55 billion -- to acquire its German and Italian sister companies. Sky, which is also part-owned by Murdoch, said it wants to create a multinational pay-TV business, with enhanced headroom for growth and immediate benefits of scale.

Read More: Pandora Will Be a Penny Stock Someday Soon as Spotify, iTunes Thrive

In Paris, LVMH, the maker of Louis Vuitton handbags, fell over 7% on poor results, which weighed on luxury goods rivals across the sector.

In London, the FTSE100 was up 0.03% at 6,823.20. In Paris the CAC40 was off 0.59% at 4,384.55 and in Frankfurt, the DAX was down 0.28% at 9,767.02. Moscow's MICEX index was down 1.19%, after three days in positive territory at 1,392.1. Japan's Nikkei225 closed up 1.13% at 15,457.87.

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs