The major markets across Europe are expected to open slightly higher on Friday morning, taking cues from Wall Street, where the major indices staged yet another late-day rally to end in positive territory, led by financial stocks and technology related stocks. Better-than-expected quarterly results from JP Morgan and positive second quarter outlook from mobile phone giant Nokia lifted sentiment after a slew of economic data raised hopes that the pace of economic downturn is slowing demand and the economy can begin to recover sooner-than-expected.
A Commerce Department report showed that housing starts fell 10.8% to an annual rate of 510,000 in March from the revised February estimate of 572,000. Economists had expected starts to slip to 540,000 from the 583,000 originally reported for the previous month. The Labor Department said initial jobless claims fell to 610,000 from the previous week's revised figure of 663,000. Economists had expected jobless claims to edge up 658,000 from the 654,000 originally reported for the previous week. However, continuing claims rose to a new record high. The Philadelphia Federal Reserve said its index of regional manufacturing activity rose to a negative 24.4 in April from a negative 35.0 in March. While a negative reading indicates a contraction in the sector, the index increased by much more than expected.
The Dow closed up 95.81 points or 1.2% at 8,125, the Nasdaq closed up 43.64 points or 2.7% at 1,670 and the S&P 500 closed up 13.24 points or 1.6% at 865.
Across Europe, the markets ended in positive territory on Thursday, led by financials and technology stocks on hopes that the worst of the economic crisis is over. The FTSEurofirst 300 index of pan-European blue chips closed 1.75% higher at 802 points, while the narrower DJ Stoxx 50 index rose 1.78% to 1,972 points. The U.K.'s FTSE 100 index climbed 2.13% to 4,053, while France's CAC 40 index surged up 1.76% to 3,038 and Germany's DAX index rose 1.31% to 4,609.
Most markets across the Asia-Pacific region are also trading in positive territory, mirroring the gains on Wall Street, but off the day's high on profit taking.
The underlying trend seems to be cautiously optimistic among investors despite the downward risk for the economies remaining relatively higher.
On the economic front, the market might react to Eurostat's external trade data for February. The Euro area trade deficit is forecast to narrow to EUR 5 billion from EUR 10.5 billion in January.
In corporate news, ARCADIS (ARCVF.PK) said it has won a major contract to provide project management services to the Brazilian mining company Vale for a large project in Sohar, Oman. The contract totals approximately US$24 million.
Fitch Ratings has cut the credit rating for UniCredit SpA, the largest bank in Italy, citing increased exposure to emerging market in Europe as the primary reason. Banks might witness action following the cut in the credit rating.
The biggest retailer in Europe, Carrefour SA reported a drop in first quarter net sales attributing economic slowdown across the markets as primary reason.
Morgan Crucible Co PLC (MGCR.L) reported first-quarter group revenues of GBP 255 million, compared to GBP 178 million in the equivalent period last year. Excluding the impact of acquisitions, first-quarter revenues were up 11% year-over-year, reflecting the benefits of favorable currency translation.
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