European, Us Stocks Advance On Retailer Earns

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European stock markets recouped earlier losses and Wall Street advanced thanks to solid earnings reports from two of the United States' leading retailers that boosted confidence about the pace of economic recovery.
The FTSE 100 index of leading British shares closed 0.4 percent higher at 5,296.38, Germany's DAX added 0.4 percent to 5,686.83, and France's CAC-40 slipped 0.1 percent to 3,806.01.
In midday trading in New York, the Dow Jones industrial average was up 0.8 percent at 10,276.07, while the broader Standard & Poor's 500 index rose 0.6 percent to 1,093.94.
The gains in the U.S. came in the wake of better-than-expected earnings from teen clothing retailer latex Jackets Co. and an improved outlook from department-store chain J.C. Penney Co. Without the help of the consumer, who accounts for around 70 percent of the U.S. economy, any global economic recovery will be modest.
Some of the mood was soured by a disappointing consumer confidence survey from the University of Michigan. Its main index fell for the second month running in November to 66 from October's 70.6.
"Not the best note to finish the week on as equity markets have been hesitant and mixed in terms of price action in the past few days despite the Group of 20 pledge last week to maintain an accommodative policy," said Neil Mackinnon, global macro strategist at VTB Capital in London.
"However, the Fed will continue to provide liquidity," he added.
Many analysts think the near-term direction of the markets is dependent less on fundamentals, such as earnings and economic data, and more on whether the S&P 500 can close above the 1,100 mark. Despite several attempts this week, it has not been able to sustain a break above that level through the end of the session.
"The question investors are asking now is whether we can eventually push higher...or whether recent congestion is a sign that the rally higher is over," said Geoffrey Yu, an analyst at UBS.
"U.S. retail sales figures on Monday and U.K. inflation data on Tuesday both have the potential to add further evidence of economic recovery, but again any shortfall could leave traders itching to book profits," said Anthony Grech, market strategist at IG Index.
Stocks have rallied strongly since March's lows with many of the world's major indexes trading at, or near, their highest levels this year as investors reined in their economic doomsday expectations to factor in a swifter than anticipated global economic rebound.
News that the 16-country eurozone emerged from recession in the third quarter did little to excite investors as the 0.4 percent quarterly rise was less than many had been anticipating, and as growth in some major economies fell short of forecasts. With a rebound in exports partially offset by weak household spending, Germany's economy grew by 0.7 percent and France's by 0.3 percent.
Still, the third quarter rise in eurozone output was the first in six quarters and brings to an end Europe's sharpest recession since World War II. Though the eurozone's banks were not at the epicenter of the financial crisis that triggered the global economic downturn, the region suffered as demand for its high-value products fell off a cliff.
Shares of British Airways PLC and Spain's Iberia rose strongly early Friday after they confirmed the previous day they planned to merger. Iberia closed up around 3 percent and British Airways managed to finish 1 percent higher.
Earlier, Asian markets closed mixed amid investor uncertainty about the global outlook after Wall Street's losses on Thursday.
Tokyo's Nikkei 225 fell 34.18 points, or 0.4 percent, to 9,770.31 while Seoul's Kospi was off 0.1 percent at 1,571.99. Singapore's market traded flat, while Sydney shed 0.8 percent.
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European, Us Stocks Advance On Retailer Earns

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This article was published on 2011/01/03