RTTNews - The major European markets are likely to open mixed amid weaker-than-expected Germany's retail sales data and bargain hunting after yesterday's heavy bout of selling. Commodity stocks could be in focus after crude oil price rose above $70 a barrel in Asian trading.
Despite a slightly positive start, Wall Street ended lower Tuesday as traders digested consumer confidence figures that fell short of expectations. A report from the Conference Board said its consumer confidence index fell to 49.3 in June from a revised 54.8 in May, surprising economists, who had expected the index to edge up to 55.3 from the 54.9 originally reported for the previous month.
Separately, while the S&P Case-Shiller Home Price Index, a closely watched measure of home prices, showed a 0.6 percent decline from March to April, the Institute for Supply Management - Chicago said its index of activity in the manufacturing sector jumped to 39.9 in June from 34.9 in May, although a reading below 50 indicates a continued contraction. The major averages finished firmly in negative territory, offsetting Monday's gains. The Dow Jones Industrial Average ended down 0.97%, the Nasdaq Composite dipped 0.49% and the S&P 500 index fell 0.85%.
Crude oil futures slipped from eight-month peaks to below $70 a barrel in New York trading on Tuesday, as the dollar rose against the euro and the yen. However, in Asian trading on Wednesday, crude oil was last trading firm at $ 70.33 a barrel, up 0.63% after industry inventory data from American Petroleum Institute showed crude stocks fell much more than expected last week.
On Tuesday, the European markets ended lower following a discouraging U.S. consumer confidence report and weaker crude oil and base metals prices. The FTSEurofirst 30 index of pan-European blue chips closed 1.10% lower, while while the narrower DJ Stoxx 50 index fell 1.22%. Around Europe, the U.K.'s FTSE 100 index fell 1.04%, France's CAC 40 index dropped 1.67% and Germany's DAX index slipped 1.56%.
Turkey's trade deficit narrowed to US$3.5 billion in May from US$6.8 billion in the previous year, the Turkish Statistical Office said Tuesday. Economists expected the deficit to be US$3.4 billion. Total exports dropped 41% annually to US$7.35 billion, while total imports fell 43.9% to US$10.84 billion.
Germany's Federal Statistical Office announced that the retail sales dropped 2.9% year-over-year in real terms in May, compared with a .03% fall in April, revised from a 0.8% decline reported initially. Economists were looking for a decline of 1.5%. A year earlier, retail sales were up 1.4%. Separately, a a report by Statistics Estonia said industrial output dropped a working day adjusted 30% year-over-year in May, after falling 33.7% in April.
Investors look forward to Purchasing Managers survey results due from the major eurozone economies, the U.S. ADP payroll survey report, June ISM data and pending home sales report.
In corporate news, Paris based drug maker Sanofi-Aaventis (SNY) announced a corporate restructuring plan that involves closing of four facilities, a possible divestiture and voluntary departure of some personnel. EXCO Resources Inc.(EXCO) revealed a definitive agreement with BG Group plc to form a joint venture for the development and operation of EXCO's Haynesville shale and certain other related natural gas assets.
Gannett Co., which offers more than 80 U.S. daily newspapers, including USA TODAY, will cut more than 1,000 jobs in response to continuing revenue declines, according to a report published Tuesday in the Wall Street Journal. Sir Win Bischoff is being lined up as the next chairman of Lloyds Banking Group plc, the Financial Times reported Tuesday, citing people close to the process.
French hotel group Accor SA said Tuesday that it is studying a voluntary departure plan to reduce its workforce at its headquarters and hotels division. The world's biggest maker of nuclear reactors Areva SA announced Tuesday plans to increase its capital and divest its transmission and distribution unit to finance expansion in the growing global atomic power market.
French retail giant Carrefour SA plans to cut costs by 4.5 billion euros(6.3 billion dollars) by 2012 as part of a restructuring plan announced by its chief executive Lars Olofsson on Tuesday. France's third-biggest bank Credit Agricole SA has finalized the acquisition of another 35% stake in share custody unit Caceis to increase its stake to 85 percent.
Marks & Spencer Group Plc said Wednesday that Group sales rose 2.9% for the 13 weeks to 27 June 2009. AstraZeneca Plc announced that the European Commission has granted marketing authorization for the oral anti-cancer drug, IRESSA.
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