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Market Update

France and Spain Miss Deficit Targets, Philips Net Falls 12%

Author: Jeffrey Gogo
Last Update: 12:26 PM ET April 22 2013

4:00 PM Frankfurt European markets extended gains for the second day in a row following the sustained rise in Asian markets. The euro firmed against the dollar and the yen. UK plans to sell its stake in Urenco that may fetch as much as 3.3 billion. Philips Electronics quarterly net fell 12%.

European indexes marginally higher on the first day of the week followed by gains on Friday. Philips shares fall 5.19%, as first quarter profit declines.

Nearly 1,700 Lufthansa flights were grounded today after the airline faced a strike.

In London trading, the FTSE 100 rose 0.08% or 4.86 to 6,291.45. The DAX in Frankfurt inched 0.29% to 7,481.95. In Paris, the CAC 40 added 0.13% or 4.68 to 3,656.64.

Markets in 11 countries closed higher in the euro zone after Italian lawmakers elected Giorgio Napolitano for the second term as president.

Napolitano was re-elected after the divided Parliament failed to agree on a presidential candidate in the first five rounds of voting and led to the resignation of Democratic Party Leader Pier Luigi Bersani.

France and Spain Miss Deficit Targets

France and Spain both missed their budget deficit targets in 2012, as austerity bite harder, the Eurostat said Monday.

In Paris, the 2012 deficit was 4.5% of gross domestic product, higher than the 4.5% target.

Madrid reported budget deficit of 7.1% against initial targets of 6.3%, and higher than 6.8% reported in December.

Last year, the euro zone budget deficit declined to 3.5% of GDP from 4.2% in 2011. The deficit is forecast to shrink 2.8% in the current year.

Philips Net Falls 12%

Royal Philips Electronics N.V., the world's biggest healthcare and consumer appliances maker, fell as much as 5.2% after reporting first quarter net earnings fell 12% to 162 million from 183 million a year ago but low-energy bulb sales rose.

LED sales surged 38%, contributing 23% of overall lighting sales, which remained flat due to weak construction industry demand. LED bulbs last several years longer than conventional lights and are ten times more energy-efficient.

Worldwide sales gained 1% to 5.3 billion. Appliances sales rose 10% but sales from healthcare fell 1% from a year earlier.

Profit from the home entertainment unit reached 8 million, as losses on TV sales declined. In the quarter to December last year the Dutch firm posted 255 million loss.

Philips estimates US and European sales to weaken during the first half in 2013 ""due to adverse market trends.""

Full-year sales growth is guided in the range 4% to 6% and margin on earnings before interest, tax and amortization of between 10% and 12%.

Lufthansa Grounds Most Flights

Lufthansa shares rose 1.43% after the German airline cancelled nearly 1,700 flights due to strike over pay.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc