RTTNews - The major European averages may see some consolidation at existing levels on Thursday on alternate bouts of buying and profit taking after closing at their highest levels since early January in the previous session. Investors are likely to react to retail sales reports from both Great Britain and Italy and Eurozone balance of payments report due later in the day.
Despite a flat close on Wall Street overnight, the major markets across the Asia-Pacific region rose on Thursday on growing optimism about the prospects of a global economic recovery. However, with several big firms across the globe scheduled to report quarterly earnings over the next few days, action remained somewhat stock specific.
On Wall Street, stocks finished on a mixed note on low volumes Wednesday amid mixed reaction to earnings reports, as most firms met or beat estimates by cost cutting rather than through growth in revenue. In economic news, Federal Reserve Chairman Ben Bernanke reiterated that the U.S. economy is showing signs of stabilization, although he noted that the economy is still in a fragile state, with unemployment high and consumer spending shaky. The Dow Jones Industrial Average fell 0.39% and the S&P 500 index slipped 0.05%, but the Nasdaq Composite ended up 0.53%.
Crude oil prices dropped for the first time in six sessions on Wednesday, as investors mulled data released by the Energy Information Administration on weekly inventories. Commercial crude oil stocks in the United States fell by 1.8 million barrels last week on the back of a drop in imports and a rise in distillate supplies to their highest levels in nearly 25 years, the report showed. After settling at $65.40 a barrel, down 21 cents in New York trading on Wednesday, light sweet crude for September delivery rose modestly to $65.60 a barrel in Asian trading.
In corporate news, computer interface devices manufacturer Logitech International S. A. on Wednesday reported a loss for the first quarter compared to a profit last year, hurt by lower margins as well as a 36% sales drop on lower demand amid the economic downturn.
Swiss engineering group ABB reported a smaller-than-expected 31 percent drop in its second-quarter net profit and said demand developments were still hard to predict for the rest of the year.
Zurich-based Credit Suisse Group said on Thursday that its second-quarter net profit rose 31% helped by a healthy showing from its investment bank.
Porsche Automobil Holding SE said Thursday its supervisory board cleared at an extraordinary meeting the plan for a capital increase of at least euro 5 billion($7.1 billion).
France's Valeo said that it has received 300 million euros from the European Investment Bank to fund research projects. Ericsson, a joint venture of STMicroelectronics and LM Ericsson Telephone Co. Thursday reported a net loss of $213 million for the second quarter of 2009.
The European markets rose for the eighth day on Wednesday, their longest winning streak since 2006, as better-than-expected earnings from companies such as TomTom and Modern Times Group cheered investors. The FTSEurofirst 300 index of pan-European blue chips closed 0.21% higher, while the narrower DJ Stoxx 50 index rose 0.23%. Around Europe, the U.K.'s FTSE 100 index advanced 0.28%, France's CAC 40 index edged up 0.07% and Germany's DAX index added 0.54%.
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