RTTNews - The European markets fell on Thursday, as banking stocks retreated and a government report showed first-time claims for unemployment benefits in the U.S. unexpectedly increased last week.
The U.S. Labor Department said in its report that initial jobless claims rose to 627,000 from the previous week's revised figure of 612,000. Economists had expected jobless claims to edge down to 600,000 from the 608,000 originally reported for the previous week.
However, a report from the U.S. Commerce Department showed that gross domestic product fell 5.5% in the first quarter compared to the 5.7% decrease that had been reported. The revision came as a surprise to economists, who had expected the drop in GDP to be unchanged at 5.7%.
Crude for August delivery rose $1.68 to $70.35 a barrel on the New York Mercantile Exchange, by the time the European markets closed, after the release of the U.S. GDP data.
The FTSEurofirst 300 index of pan-European blue chips closed 0.92% lower at 845.71 points, while the narrower DJ Stoxx 50 index fell 1.15% to 2,094.20 points.
Around Europe, the U.K.'s FTSE 10 index fell 0.64% to 4,252.57, while France's CAC 40 index slipped 0.68% to 3,163.10 and Germany's DAX index dropped 0.73% to 4,800.56.
Banking stocks edged lower after Asia-focused bank Standard Chartered it remained cautious on its outlook, with consumer banking income for the first-half expected to be lower than the previous six months. Standard Chartered shares fell 2.4 %.
HSBC, Europe's largest bank, also declined 2.4%, while UBS, Switzerland's largest bank, dropped 5.9% and Credit Suisse, the second largest, slipped 4.1%.
Bank of Ireland dropped 5.8% and Allied Irish Banks slid 4.4% after the International Monetary Fund said the Irish economy is in the midst of an unprecedented economic correction, and estimated that Irish banks would face around $35 billion loses through the end of 2010.
Sanofi-Aventis, France's biggest drugmaker, lost 4.6% after UBS said some investors are concerned that the drugmaker's Lantus diabetes treatment may have safety issues.
BASF, the world's biggest chemicals maker, fell 2.5% after the company said it will close a polystyrene plant in Germany.
On the other hand, Infineon, Europe's second biggest chipmaker, rose 4.6% after the company raised its third quarter guidance.
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