European equities rebound, US gains muted
26 November 2015, Nirapad News: European stocks rebounded Wednesday on receding worries about Russian-Turkish tensions, while US gains were muted following a stream of economic data ahead of the Thanksgiving Day holiday.
Strong advances in London, Paris and Frankfurt marked a welcome shift from Tuesday’s pullback in the wake of the shootdown of a Russian warplane by Turkey on the Syrian border.
European markets rose “after the escalation of tensions between Russia and Turkey proved short-lived,” said Rebecca O’Keeffe, head of investment at stockbroker Interactive Investor.
Eurasia Group said an “ego-driven escalation” of the conflict between Russian President Vladimir Putin and Turkish President Recep Tayyip Erdogan remained an “improbable but real risk.” But the consultancy group expressed measured optimism.
“The chance of military escalation is low,” Eurasia Group said. “Russia has a lot to lose from taking on Turkey. The same calculation will restrain Ankara.”
London’s benchmark FTSE 100 index rose 1.0 percent, Frankfurt’s DAX 30 jumped 2.2 percent and the Paris CAC 40 index gained 1.5 percent.
In the US, both the Dow Jones Industrial Average and the broad-based S&P 500 ended almost flat. But the tech-rich Nasdaq Composite Index climbed 0.3 percent following a batch of mostly positive economic data.
The most concerning was a Commerce Department report that showed consumer spending rose just 0.1 percent in October. Other data showed jobless claims edging lower, durable goods orders rising and new-home sales gaining.
US markets will be closed Thursday and shutter early on Friday.
“The data was cheered, but I think there’s a little bit of trepidation ahead of Thanksgiving,” said Mace Blicksilver, director of Marblehead Asset Management.
– British homebuilders gain –
In foreign exchange activity, the euro nudged down to $1.0622 as Capital Economics speculated that “the prospect of a historically large divergence between US and eurozone monetary policy looks set to push the euro below parity versus the US dollar for the first time since late 2002.”
British homebuilders headed FTSE 100 risers as the finance minister, George Osborne, announced plans to build 400,000 new homes deemed by the government to be affordable. Taylor Wimpey and Persimmon each rose about 3.4 percent.
Also in London, travel service company Thomas Cook advanced 11.4 percent on its first annual net profit for five years, more than overturning seven percent losses over two previous sessions.
In the US, farm-equipment maker Deere climbed 4.8 percent despite reporting lower earnings and forecasting a seven percent drop in equipment sales in 2016. Deere said its outlook “represents a level of performance that is considerably better than we have experienced in previous downturns.”
HP plunged 13.7 percent after forecasting earnings of 33-38 cents per share in the fiscal first quarter of 2016, below the 42 cents projected by analysts.
Tesla Motors rose 5.2 percent following a Credit Suisse report that said the company should meet its fourth-quarter car delivery targets and that its earnings outlook looked solid for 2016.
Key figures around 2200 GMT –
New York – Dow : UP 0.01 percent at 17,813.39 (close)
New York – S&P 500 : DOWN 0.01 percent at 2,088.87 (close)
New York – Nasdaq : UP 0.26 percent at 5,116.14 (close)
London – FTSE 100 : UP 1.0 percent at 6,337.64 points (close)
Frankfurt – DAX 30 : UP 2.2 percent at 11,169.54 (close)
Paris – CAC 40 : UP 1.5 percent at 4,892.99 (close)
EURO STOXX 50 : UP 1.5 percent at 3,462.06 (close)
Tokyo – Nikkei 225 : DOWN 0.4 percent at 19,847.58 (close)
Euro/dollar: DOWN to $1.0622 from $1.0642 in late US trade on Tuesday
Dollar/yen : UP to 122.70 yen from 122.55 yen