The European markets declined on Thursday, after several weaker than expected economic reports from around the globe. Japanese retails sales fell more than expected overnight, which was followed up by a decline in Eurozone economic sentiment. German unemployment increased and U.S. weekly jobless claims came in higher than expected.
Investors continued to be cautious Thursday as they watch for any clues regarding further economic stimulus in the United States. The highly anticipated speech by Federal Reserve Chairman Ben Bernanke will take place tomorrow at the Kansas City Federal Reserve Bank's annual symposium in Jackson Hole, Wyoming.
Italy had a successful auction on Thursday as it sold its five- and 10-year debt at lower yields as investors remained hopeful that the European Central Bank may resume its bond-buying to help lower the borrowing costs of troubled euro area countries.
The Italian Treasury raised a total EUR 7.29 billion from today's auction, close to the maximum target set for the sale. The latest auction follows two successful sales yesterday and the day before, which raked in proceeds totaling nearly EUR 13 billion.
Today the agency sold EUR 4 billion of the new benchmark bond due November 2022, matching the top end of its target range. The yield on the 10-year debt dropped to 5.82 percent from 5.96 percent paid on July 30 for a security of similar maturity. The country also placed EUR 2.5 billion of its June 2017 bond to yield 4.73 percent, which was far less than the 5.29 percent paid in the previous sale on July 30.
The Euro Stoxx 50 index of eurozone bluechip stocks declined by 1.03 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.62 percent.
The DAX of Germany dropped by 1.45 percent and the CAC 40 of France fell by 1.02 percent. The FTSE 100 of the U.K. decreased by 0.33 percent and the SMI of Switzerland finished down by 0.68 percent.
In Frankfurt, automakers were under pressure. Daimler fell by 5.43 percent, BMW lost 4.90 percent and Volkswagen declined by 4.04 percent.
In Paris, Renault dropped by 3.68 percent and Peugeot decreased by 3.82 percent.
Carrefour surged by 7.37 percent, after its loss for the first-half narrowed significantly.
Vivendi climbed by 3.11 percent. The media and telecom group reported a lower profit for the second quarter, but confirmed its full year forecast.
Pernod-Ricard fell by 2.01 percent. The company reported its best growth since 2007/08, and also announced some appointments, including that of Danièle Ricard as Chairman of the Board of Directors.
In London, miners finished notably lower. Anglo American lost 3.44 percent and Antofagasta declined by 2.58 percent. BHP Billiton dropped by 3.26 percent and Rio Tinto finished down by 2.09 percent. Vedanta Resources fell by 2.38 percent and Eurasian Natural Resources lost 2.70 percent.
Barclays decreased by 1.53 percent. The lender named Antony Jenkins as its new chief executive, effective immediately.
WPP dropped by 1.56 percent, after it announced first-half results. The company also lowered its revenue forecast for 2012.
Shares of Admiral Group declined by 2.38 percent, following the company's report for the first half of the year.
Eurozone economic sentiment deteriorated further in August reflecting the sharp weaknesses in confidence among consumers, retailers and construction managers due to concerns over recession and the lingering sovereign debt crisis.
The economic sentiment index dropped to 86.1 from 87.9 in July, European Commission's monthly survey revealed Thursday. The reading was the lowest since late 2009 and below the expected level of 87.5.
German unemployment increased for the fifth month in August as firms shed jobs fearing a recession in the 17-nation currency bloc. The Federal Labor Agency on Thursday said the number of unemployed increased by adjusted 9,000 from July to 2.9 million. It was forecast to increase by 7,000, following July's monthly rise of 9,000.
However, the jobless rate remained unchanged at a seasonally adjusted 6.8 percent in August as economists expected.
Spain's harmonized inflation accelerated more than expected on higher fuel costs in August, flash estimate from the statistical office Ine showed Thursday. Inflation, as measured by the harmonized index of consumer prices or HICP, rose to 2.7 percent in August from 2.2 percent a month ago. The rate was forecast to rise to 2.3 percent.
Initial claims for U.S. unemployment benefits unexpectedly came in unchanged in the week ended August 25th, according to a report released by the Labor Department on Thursday.
The report showed that initial jobless claims came in at 374,000, unchanged compared to the previous week's revised figure. Economists had expected jobless claims to edge down to 370,000 from the 372,000 originally reported for the previous week.
Personal income and spending in the U.S. both increased in the month of July, according to a report released by the Commerce Department on Thursday, with the increases both coming in line with economist estimates.
The report showed that personal income rose by 0.3 percent in July, matching the increases seen in the two previous months. The increase also came in line with estimates. The Commerce Department also said personal spending increased by 0.4 percent in July after coming in roughly flat in June. The spending growth also matched the expectations of economists.
by RTT Staff Writer
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