overseas markets

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    April 4 (Bloomberg) -- European stocks rose, set for the biggest weekly gain in a year, as Sanford C. Bernstein & Co. recommended buying shares of metal producers BHP Billiton Ltd. and Rio Tinto Group on the outlook for demand from China.

    Asian shares fell, while U.S. index futures were little changed before a jobs report that may show employment fell for a third month.

    BHP Billiton, the world's largest mining company, jumped to a three-week high. AstraZeneca Plc climbed for a fifth day after Morgan Stanley increased its price estimate for the drugmaker's shares. UBS AG gained, bringing its rally this week to 15 percent, after former President Luqman Arnold called for a breakup of Europe's biggest bank by assets.

    Europe's Dow Jones Stoxx 600 Index added 0.2 percent to 318.5 as of 11:56 a.m. in London, extending its advance this week to 3.9 percent, the biggest since March 2007. Futures on the Standard & Poor's 500 Index decreased less than 0.1 percent, and the MSCI Asia Pacific Index lost 0.5 percent.

    ``If you look at the valuations of natural resources, the companies are still cheap,'' said Bob Parker, vice chairman of Credit Suisse Asset Management, which oversees more than $600 billion. Parker was speaking in a Bloomberg Television interview in London.

    The Stoxx Basic Resource Index trades at 11.6 times estimated earnings, compared with a four-year average price-to-earnings ratio of 13.2. The index has dropped 2.8 percent this year, the smallest decline among the Stoxx 600's 18 industry groups.

    The Labor Department's report may show payrolls shrank by 50,000 workers, according to the median estimate of 79 economists surveyed by Bloomberg News. The jobless rate rose to 5 percent from 4.8 percent in February, the survey also showed.

    The report is due in Washington at 8:30 a.m.

    Investor Focus

    The ``market is waiting for the unemployment figure from the U.S. as they seek to see how bad the downturn might be,'' said David Gonzalez, who manages about $45 million in equities at Credit Suisse Group in Madrid.

    National indexes increased in 13 of the 17 western European markets that were open. The U.K.'s FTSE 100 gained 0.4 percent, while France's CAC 40 rose 0.2 percent. Germany's DAX was little changed.

    BHP, the world's biggest mining company, gained 2.2 percent to 1,595 pence. Rio Tinto, the third-largest, rallied 2.1 percent to 5,558 pence.

    Sanford C. Bernstein upgraded the stocks to ``outperform'' from ``market-perform'' on expectations that urbanization in China will spur metals demand.

    The Stoxx 600 has dropped 13 percent this year as more than $232 billion in losses tied to the collapse of the U.S. subprime market curbs profit growth. Analysts are forecasting earnings will rise only 1.9 percent for Stoxx 600 members in 2008, down from 11 percent predicted at the end of last year, Bloomberg data show.

    AstraZeneca, Glaxo

    AstraZeneca climbed 3.1 percent to 2,114 pence. Morgan Stanley increased its price estimate for shares of Britain's second-largest drugmaker to 2,200 pence from 2,150 pence. The stock has rallied 14 percent this week.

    GlaxoSmithKline Plc rose 1.3 percent to 1,136 pence. Europe's largest drugmaker gained permission to sell its Rotarix oral vaccine for children in the U.S. The inoculation was approved by the Food and Drug Administration to protect infants from rotavirus, Glaxo said in a statement on PR Newswire.

    UBS, the world's largest money manager, climbed 3.2 percent to 33.42 Swiss francs. Arnold has written to the UBS board suggesting a breakup of the Swiss bank, according to a letter to board member Sergio Marchionne released today.

    The bank will review the letter and respond ``in due course and in an appropriate form,'' said Rebeca Garcia, a spokeswoman for UBS.

    UBS is headed for its best week this year after saying on April 1 that it will replenish capital by raising $15 billion.

    Technip SA climbed 2.5 percent to 51.79 euros after Goldman Sachs Group Inc. raised Europe's second-biggest oilfield-services provider to ``buy'' from ``neutral.''

    ``We believe the sector looks attractive and highlight the potential for mergers and acquisitions over the coming 12 months,'' analysts including Henry Tarr wrote in a note to investors yesterday
 
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