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European Markets Trimmed Their Losses After U.S. Home Sale Report

The European markets finished mixed on Thursday, following the strong gains from the previous two sessions. The weaker than expected sentiment result from the Eurozone dragged markets lower in early trade. Disappointing earnings results from European banks weighed on shares of financial stocks. The better than expected pending home sales report from the U.S. in the afternoon helped the markets to pare some of their losses.

The intensification of the euro area debt crisis hampered financial integration in the region last year and thereby significantly affected the transmission of the monetary policy, the European Central Bank said in a report published Thursday.

"The intensification of the sovereign bond crisis strongly affected the euro area financial system. As a result, the integration of markets has deteriorated further," the bank said in its annual report on financial integration in Europe. "Since 2007, and particularly following the intensification of the European sovereign bond market crisis during 2011, the financial integration in Europe has slowed down considerably."

The Euro Stoxx 50 index of eurozone bluechip stocks declined by 0.06 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, finished up by 0.04 percent.

The DAX of Germany increased by 0.53 percent and the FTSE 100 of the U.K. climbed by 0.38 percent. The CAC 40 of France fell by 0.13 percent and the SMI of Switzerland decreased by 0.46 percent.

In Frankfurt, Deutsche Bank sank by 3.12 percent. The financial services giant reported a sharp decline in profit for the first quarter amid lower revenues and a charge related to the sale of Actavis Group. Commerzbank also declined by 1.91 percent.

Volkswagen increased by 8.72 percent, after the company reported a surge in its first-quarter profit after tax to 3.19 billion euros from last year's 1.71 billion euros, with pre-tax profit jumping 93.4 percent to 4.30 billion euros from 2.22 billion euros a year ago.

Bayer rose by 2.22 percent, after the company reported a 53 percent increase in net profit from the prior year.

Fresenius climbed by 2.64 percent. The company offered to acquire Rhoen-Klinikum for 3.1 billion euros in cash.

In Paris, Renault dropped by 2.15 percent. The French automaker said that its first quarter revenue fell 8.6 percent to 9.54 billion euros from 10.43 billion euros in the same quarter last year because of a very unfavorable European market.

Shares of Societe Generale finished lower by 3.34 percent. Credit Agricole fell by 3.38 percent and BNP Paribas dropped by 1.18 percent.

In London, AstraZeneca Plc plunged by 6.34 percent. Its chief executive officer, David Brennan, announced his decision to retire at the end of May. The announcement came moments after the British pharma giant reported weak first-quarter results and lowered its full-year guidance amid challenging market conditions and loss of exclusivity of several brands.

Shares of Barclays rose by 0.69 percent, after its better than expected first quarter earnings report. The U.K. bank reported a 22 percent increase in its first quarter profit.

Energy giant Royal Dutch Shell climbed by 3.49 percent, after it reported a better-than-expected 15.9 percent rise in its first-quarter adjusted profit.

Unilever increased by 2.84 percent, after beating expectations for first quarter sales.

Eurozone economic confidence declined notably in April, wiping out the gains logged in the first quarter. The weakness in both economic and business sentiment hurt recovery hopes. Economic confidence fell more than expected to 92.8 from a revised 94.5 in March, survey results from the European Commission showed Thursday. Economists had forecast the reading to drop to 94.2.

Confidence among British consumers climbed to its highest level in nine months in March as households turned less concerned about the economy and employment prospects, a survey by Nationwide Building Society showed Thursday. The consumer confidence index rose to 53 in March, the highest since June 2011, from 44 in February. Economists had forecast a slight fall to 43.

New claims for U.S. unemployment benefits dipped slightly in the third week in April, although the numbers disappointed economists, who had predicted a notable drop. According to the Labor Department, new unemployment claims for the week ended April 21st came in at a seasonally adjusted level of 388,000.

The figure for the latest week marks a marginal drop from the previous week's revised level of 389,000, which was revised up from the 386,000 initially reported. Most economists had forecast a somewhat more significant drop in the level of new claims, predicting the figure would fall to roughly 375,000.

Pending home sales in the U.S. rose by much more than anticipated in the month of March, according to a report released by the National Association of Realtors on Thursday. NAR called the data another signal the housing market is recovering.

NAR said its pending home sales index rose by 4.1 percent in March following a revised 0.4 percent increase in February. Economists had expected a much more modest 1.0 percent increase compared to the 0.5 percent drop originally reported for the previous month.

by RTTNews Staff Writer

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