RTTNews - The European markets rose for the second day on Tuesday, as banking stocks rallied after Goldman Sachs reported a record quarterly profit and mining stocks gained after base metals prices advanced.
The U.S. Labor Department said that producer prices rose 1.8% in June. This followed a rise of 0.2% that took place in May and an advance of 0.3% in April. Economists had predicted an advance of about 1% for the month.
Core producer prices, which exclude the impact of the volatile food and energy sectors, climbed 0.5% last month. This after a decline of 0.1% in May and a rise of 0.1% in April. Core prices were expected to rise 0.1%.
The U.S. Commerce Department said in its report that retail sales rose 0.6% in June following an unrevised 0.5% increase in May. Economists had been expecting retail sales to increase by a somewhat more modest 0.4%.
Excluding a 2.3% increase in sales by motor vehicle and parts dealers, retail sales increased by 0.3% in June compared to a 0.4% increase in May. The increase in ex-auto sales came in below economist estimates of 0.5% growth.
The Mannheim-based ZEW Center for European Economic Research said its economic sentiment indicator for Germany fell to 39.5 in July from 44.8 in June, while economists expected the reading to rise to 47.8.
Crude for August delivery rose $0.55 to $60.24 a barrel on the New York Mercantile Exchange, by the time the European markets closed, after the release of strong U.S. retail sales and wholesale price reports.
The FTSEurofirst 30 index of pan-European blue chips closed 1.20% higher at 840.15 points, while the narrower DJ Stoxx 50 index rose 1.29% to 2,083.68 points.
Around Europe, the U.K.'s FTSE 100 index rose 0.85% to 4,237.68, while France's CAC 40 index surged up 0.98% to 3,081.87 and Germany's DAX index climbed 1.26% to 4,781.69.
Banking stocks gained after Goldman Sachs reported second quarter earnings that rose from last year and beat analysts' estimate. HSBC, Europe's largest bank, rose 2.1%, while BNP Paribas, France's largest, surged up 3.1% and Deutsche Bank, Germany's biggest lender, climbed 2.6%. UBS, Switzerland's largest bank, gained 3.6%.
Mining stocks rose after base metals prices advanced. BHP Billiton, the world's biggest miner, surged up 3.5%, while Anglo American, the second biggest, rose 2.9% and Rio Tinto, the third biggest, climbed 5.1%. Copper miner Antofagasta gained 6.5%.
BMW, the world's largest maker of luxury cars, jumped 5.3% after the Financial Times reported that the automaker is ready to increase production in the next six months.
Renault, France's second biggest carmaker, climbed 4.2% after Nissan Motor Co., which is 44% owned by Renault, said it will expand production at one of its factories in China to meet rising demand.
On the other hand, Q-Cells SE, Germany's largest solar company, plunged 14% after the company reported a ?62 million second quarter loss before interest and taxes and said it will fall short of its 2009 earnings targets.
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