The European markets finished mixed again at the end of Thursday's trading session. The mood among investors remained cautious ahead of today's announcement from the U.S. FOMC. Investors have been hoping for further economic stimulus and will be closely monitoring the Fed's announcement and the subsequent press conference from Chairman Ben Bernanke.
The debt-to-GDP ratio would be sustainable and fall at some point for both Spain and Italy, if the countries successfully achieve their fiscal consolidation targets, the European Central Bank said in its monthly bulletin released Thursday.
A key driver of the results was the assumption that the governments concerned will achieve structurally balanced budgets in the medium term, as prescribed by the Stability and Growth Pact, the bank said in the report.
Italy's borrowing costs for three years fell to their lowest level in nearly two years at a debt auction on Thursday, just a day after Germany's top court approved the ratification of the euro area's permanent rescue fund. The country also saw the yield drop and demand improve for its 15-year bond, which was also auctioned today for the first time in more than a year.
Germany's IfW think tank downgraded its growth projection for both 2012 and 2013 due to weak domestic investment and slowing global growth. The Kiel-based institute forecasts the largest Eurozone economy to grow 0.8 percent this year, marginally below the prior estimate of 0.9 percent. The growth estimate for 2013 was downgraded to 1.1 percent from 1.7 percent.
The Swiss National Bank on Thursday decided to leave the cap on the franc exchange rate intact and the key interest rate unchanged near zero, as widely expected. The minimum exchange rate was maintained at CHF 1.20 per euro. The bank reaffirmed that it will continue to enforce this ceiling with 'utmost determination'.
The Euro Stoxx 50 index of eurozone bluechip stocks declined by 0.78 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.13 percent.
The DAX of Germany fell by 0.45 percent and the CAC 40 of France decreased by 1.18 percent. The FTSE 100 of the U.K. climbed by 0.65 percent and the SMI of Switzerland gained 0.36 percent.
In Frankfurt, Beiersdorf finished higher by 0.91 percent, after HSBC downgraded its rating on the stock.
Commerzbank dropped by 1.71 percent and Deutsche Bank lost 2.12 percent.
Nemetschek increased by 1.01 percent after, Berenberg initiated the stock with a "Buy" rating.
Leoni fell by 0.59 percent, after Goldman Sachs raised the stock to "Buy" from "Neutral."
In Paris, EADS sank by 10.20 percent. The plane maker confirmed it is in talks for a possible merger with BAE Systems to create an industry giant that would surpass rival Boeing Co. in terms of sales. Citigroup cut the stock to "Neutral" from "Buy." BAE Systems also declined by 7.29 percent in London.
Societe Generale declined by 3.26 percent, BNP Paribas fell by 1.57 percent and Credit Agricole lost 2.55 percent.
Vinci dropped by 3.62 percent, after Bank of America downgraded its rating on the stock to "Neutral" from "Buy."
Total finished down by 0.39 percent, after Citigroup raised its rating on the stock.
In London, Next dropped by 7.24 percent. The company issued a cautious outlook amid disappointing sales in an unusual August and early September. Marks & Spencer and Kingfisher finished down by 1.44 percent and 1.27 percent respectively.
Home Retail decreased by 4.48 percent. The retailer said sales at its subsidiary store Argos edged up in the second quarter, while sales at Homebase were hurt by poor weather conditions.
ARM Holdings gained 1.26 percent, after Apple introduced the iPhone 5.
Premier Farnell surged by 10.71 percent, after the electronic components distributor said it continues to expect growth to return in the second half of the year.
Dewhurst increased by 11.27 percent. The company expects its annual pre-tax profit to be significantly ahead of the market view.
First-time claims for U.S. unemployment benefits rose by more than expected in the week ended September 8th, according to a report released by the Labor Department on Thursday, although the data was skewed by the impact of Hurricane Isaac.
The report showed that initial jobless claims rose to 382,000 from the previous week's revised figure of 367,000. Economists had been expecting jobless claims to edge up to 370,000 from the 365,000 originally reported for the previous week.
With energy prices showing a substantial rebound in the month of August, the Labor Department released a report on Thursday showing that U.S. producer prices rose by more than expected during the month.
The Labor Department said its producer price index surged up by 1.7 percent in August following a 0.3 percent increase in July. Economists had expected the index to increase by 1.4 percent.
by RTT Staff Writer
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