European stocks dip on US jobs data

January 17, 2014 - 7:33:32 am

LONDON: European stocks pulled back yesterday, failing to gain traction from a surprise drop in US unemployment claims, while Citigroup earnings disappointed.

London’s benchmark FTSE 100 index ended the day down just 0.07 percent at 6,815.42 points.

Frankfurt’s DAX 30 fell 0.17 percent to 9,717.71 points and the CAC 40 in Paris dropped 0.30 percent to 4,319.27 points.

All three major markets had rallied on Wednesday, with sentiment boosted after the World Bank declared that the global economy was at a turning point.

“There’s been little sense of a strong direction one way or the other today as European markets mark time at or around their multi-year highs,” said Michael Hewson, Chief Market Analyst at CMC Markets UK.

In the United States, data showed new claims for US unemployment insurance fell last week to 326,000, below the average analyst forecast of 333,000.

News that the US recovery is strengthening sometimes dampens the markets, however, as investors take it as a sign the Federal Reserve will reduce its support for the economy. US shares moved lower on disappointing earnings reports, with the Dow Jones Industrial Average down 0.53 percent to 16,393.83 in midday trading.

The broad-based S&P 500 fell to 0.29 percent to 1,842.98, while the tech-rich Nasdaq Composite lost 0.12 percent at 4,209.98.

In Paris, French supermarket giant Carrefour topped the fallers board after posting poor fourth-quarter sales. Carrefour’s share price sank 3.71 percent to ¤27.25.

Airbus Group shares rose 0.62 percent to ¤56.99, following news that the French state had raised ¤451m by selling a one-percent stake in the European aerospace giant. The divestment reduces France’s stake in the publicly traded group to 11 percent — the same as Airbus Group partner Germany.

Asian stock markets rose following a record-breaking close on Wall Street as investors welcomed fresh positive US data and an upbeat Federal Reserve report.

In foreign exchange activity, the European single currency dipped to $1.3602 from $1.3604 late on Wednesday in New York. The euro rose to 83.24 British pence from 83.10 pence on Wednesday. The pound fell to 1.6339 from $1.6370. Gold prices firmed to $1,241.50 an ounce from $1,236 on Wednesday on the London Bullion Market.