Stocks: Thursday’s review

European stocks rebounded from the biggest drop in a month amid concern recent losses are overdone considering the outlook for company earnings.

Stocks rose today even as a report showed European services and manufacturing output contracted more than economists forecast in May. A composite index based on a survey of purchasing managers in both industries fell to 45.9 from 46.7 in April, London-based Markit Economics said. German business confidence also declined more than forecast in May. The Munich-based Ifo institute said today its business- climate index, based on a survey of 7,000 executives, slipped to 106.9 from 109.9 in April. Economists had forecast a reading of 109.4.

National benchmark indexes rose in all the western European markets today, except for Iceland and Greece. The U.K.’s FTSE 100 rallied 1.6 percent, Germany’s DAX advanced 0.5 percent and France’s CAC 40 gained 1.2 percent. The Greek ASE Index plunged 4.5 percent to the

Banco Bilbao Vizcaya Argentaria SA (BBVA) rose 2.5 percent to 4.93 euros. Spain’s second-largest lender will take non-binding bids for five portfolios of homes, non-performing loans and consumer loans until May 29, two people with knowledge of the matter said. A spokesman for BBVA declined to comment or disclose the nominal value of the portfolios.

Cable & Wireless Communications jumped 18 percent to 33.01 pence, the biggest gain since 2003. The U.K. based mobile-phone network operator reported earnings before interest, taxes, depreciation and amortization of $901 million, beating analysts’ estimates of $884.5 million, and said it expects similar levels through 2012 and 2013.

U.S. stocks erased losses as Italian Prime Minister Mario Monti said Greece is likely to stay in the euro and a majority of the region’s leaders support issuing a joint bond, offsetting earlier concern about a Chinese slowdown.

In the U.S., data showed companies placed fewer orders for computers, machinery and other capital equipment in April for a second month. Manufacturing in the U.S. expanded in May at the slowest pace in three months, indicating the industry that’s spurred the expansion is cooling.

Hewlett-Packard (HPQ) rose 3.3 percent to $21.77. The 8 percent workforce reduction, taking place through firings and early retirement offers, will generate annual savings of as much as $3.5 billion starting in 2014.

Facebook Inc. added 3.2 percent to $33.03, gaining for a second day. The social networking company is still trading below its initial public offering price of $38.

Dow Chemical Co. rallied 3.4 percent to $31.55. The chemical maker said an arbitration panel ruled that Kuwait must pay $2.16 billion in damages after it canceled a 2008 agreement to buy a stake in the company’s plastics business.

NetApp Inc. plunged 12 percent, the most in the S&P 500, to $28.82. The seller of hardware and software for storing data forecast first-quarter earnings trailing analysts’ estimates amid a weak economic outlook.

Tiffany tumbled 6.8 percent to $57.59. Chief Executive Officer Michael Kowalski said sales in the Americas region “underperformed, continuing a soft trend that began in the last quarter of 2011.” Sales in the first quarter rose 3 percent to $386 million in the Americas and declined 4 percent in the New York flagship store.