European Market Commentary
11/4/2009 1:51 PM ET
(RTTNews) -
The European markets rose on Wednesday, as companies such as Societe Generale, Marks & Spencer and Adidas reported better-than-estimated earnings and stronger reports on U.S. service sector and employment lifted investor sentiment.
The Institute for Supply Management in the U.S. said its index of activity in the service sector edged down to 50.6 in October from 50.9 in September, with a reading above 50 indicating growth in the sector. The decrease by the index came as a surprise to economists, who had expected the index to rise to 51.5.
U.S. private sector employment continued to decrease in the month of October, according to a report released by Automatic Data Processing, Inc. The report showed that U.S. non-farm private employment fell by 203,000 jobs in October following a revised decrease of 227,000 jobs in September. Economists had expected a loss of 198,000 jobs compared to the decrease of 254,000 jobs originally reported for the previous month.
British consumer confidence remained unchanged in October, the Nationwide Building Society said today. The consumer confidence index stood at 72 in October, unchanged from September's revised reading. The expectations index dropped to 106 from 108, while the present situation index climbed to 22 from 19. The spending index was stable at 103.
Crude for December delivery rose 0.79 to $80.39 a barrel on the New York Mercantile Exchange, by the time the European markets closed, helped by a weaker dollar and a U.S. government report showing an unexpected drop in the country's crude oil inventories.
Investors awaited the statement from the U.S. Federal Reserve following the conclusion of a two-day meeting later Wednesday. Policy makers aren't expected to raise the Fed's benchmark interest rate from essentially zero. However, investors will be looking for the Fed's take on the 3.5% annual growth rate in the economy during the third quarter and whether such growth will continue. Investors also would like more guidance on how the Fed plans to withdraw its stimulus programs without threatening the recovery.
The FTSEurofirst 300 index of pan-European blue chips closed 1.62% higher at 984.64 points, while the narrower DJ Stoxx 50 index rose 1.34% to 2,420.01 points.
Around Europe, the U.K.'s FTSE 100 index rose 1.40% to 5,107.89, while France's CAC 40 index climbed 2.40% to 3,670.33 and Germany's DAX index surged up 1.70% to 5,444.23.
Societe Generale, France's second largest bank, climbed 4.6% after the company reported third quarter profit that more than doubled from last year and beat analysts' estimate.
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