Markets: News  

Weak data send European stocks lower

LONDON (MarketWatch) -- Weak macroeconomic data knocked the air out of European stock markets on Thursday, with miners, car makers and banks leading declines, while investors also awaited a speech by U.S. Federal Reserve Chairman Ben Bernanke.

The Stoxx Europe 600 index (SXXP) lost 0.8% to close at 264.97, its lowest closing level since Aug. 3.

"There are concerns that we're moving into a season of storms, and not just in relation to the weather, and markets are always more volatile in that period," said Justin Urquhart Stewart, co-founder of Seven Investment Management.

"We can see that we have the German constitutional court decision, Dutch elections, the Jackson Hole meeting and the ECB meeting ahead of us, so there's a series of potential mines that could go off," he added. He stressed, however, that "we are seeing some fundamental changes since months ago," when people feared Greece would exit the euro zone.

The world's biggest advertising firm, WPP PLC, (WPP) was among notable decliners in the pan-European index, off 1.6%, after cutting its revenue forecast for 2012 and reporting mixed first-half results. See: WPP cuts 2012 revenue forecast

In contrast, shares of French food retailer Carrefour SA(CA) jumped 6.7% as it narrowed its first-half loss from the year-ago-period, even as operating profit dropped because of pressure on key markets. See: Carrefour narrows loss ahead of turnaround plan

ING Groep NV(INGA) rose 2.6% as Bank of Nova Scotia(BNS) agreed to buy ING Bank of Canada from its Dutch parent for 3.126 billion Canadian dollars ($3.159 billion). See: Scotiabank to buy ING Bank of Canada for $3.2 bln

Bernanke in focus

Investors are awaiting Bernanke's Friday speech at the Jackson Hole, Wyo., gathering of central bankers, where any comments about the economy and prospects of further stimulus will be scrutinized.

"Bernanke is not going to come out with any policy announcements yet. He has the ability to do much more quantitative easing than anyone else, because [the dollar is a] reserve currency, but he won't do it until he necessarily has to," Urquhart Stewart said. "We will see some political changes being made before he commits more money," he said.

Weak Japanese retail sales further added to market worries, underpinning concerns about slower global growth. See: Japan's retail sales swing negative in July

Meanwhile in Europe, the number of unemployed Germans grew by a seasonally adjusted 9,000 in August, above analysts' expectations of an 8,000 rise. See: German unemployment rises by 9,000 in August

The European Commission said its euro-zone economic-sentiment indicator fell to 86.1 in August from 87.9 in July, as all the sector indexes declined.

In Italy, the Treasury succeeded in mostly lowering borrowing costs at 5- and 10-year bond auctions.

Italy's FTSE MIB index (FTSEMIB) , however, fell 1.1% to 14,780.55. See: Italian auction highlights hunger for ECB action.

In the U.S., data showed jobless claims were unchanged at 374,000 last week, above analysts expectations for a decline to 370,000. See: U.S. jobless claims unchanged at 374,000

U.S. stocks were lower on Wall Street. Read more about U.S. stocks

Movers

Banks, which tend to be among the biggest decliners in a negative trading environment, saw broad-based losses on most European bourses.

In the U.K., HSBC Holdings PLC(HSBA) (HBC) (5) lost 1.1% and Barclays PLC(BARC) (BCS) fell 1.5%.

The FTSE 100 index (UKX) slipped 0.4% to 5,719.45. Read more about London stocks

Miners were also on the decline, as metals prices dropped. Rio Tinto PLC(RIO) (RIO) (RIO) gave up 2.1% and BHP Billiton PLC(BLT) (BHP) (BHP) dropped 3.3%.

Commodity broker Glencore International PLC(GLEN) dropped 3%, as Qatar Holding LLC, the investment arm of the country's sovereign-wealth fund, warned that it will vote against the proposed merger between Glencore and Xstrata PLC(XTA) . Shares of Xstrata lost 2.5%.

French stocks were mostly lower, with Pernod Ricard SA(RI) down 2.4%. The drinks company reported a 10% rise in full-year profit, but missed analysts' expectations. See: Pernod Ricard net up; Daniele Ricard is chairwoman

The CAC 40 index (PX1) fell 1% to 3,379.11 in Paris.

Vivendi SA(VIV) rose 3.3% as the media and telecommunications firm reported adjusted earnings before interest and tax that beat analysts' estimates. See: Vivendi profit dragged down by mobile phone unit

Germany's DAX 30 index (DAX) closed 1.6% lower at 6,895.49. Car makers led declines. BMW AG (BMW) lost 4.8%, Daimler AG(DAI) gave up 5.5% and Volkswagen AG(VOW) (VOW3) fell 4%.

"We're probably heading into a rough period for German autos, [as] margins will deteriorate faster than expected due to pricing cuts and production declines" in China, Bernstein Research wrote in a note.