Stocks hold steady as eurozone confidence improves

Written By Unknown on Selasa, 23 Juli 2013 | 22.27

MILAN — Improved European consumer confidence, China's pledge to maintain economic growth and mixed U.S. corporate results kept markets in a holding pattern on Tuesday.

Consumer confidence in the 17-country eurozone, as measured by the European Commission, hit a 23-month high in July. Analysts said it was likely driven by growing optimism about the economic outlook, though the level is still far from the historic average, however.

In Europe, the FTSE 100 index of leading British shares was up 0.2 percent at 6,634 while Germany's DAX was nearly unchanged at 8,330. The CAC-40 in France was 0.1 percent lower at 3,936.

Despite improvements, IHS Global Insight economist Howard Archer warned, European consumer confidence "is still limited compared to long-term norms while eurozone consumers continue to largely face high and rising unemployment, generally muted wage growth and tight fiscal policy."

On Wall Street, traders reacted to a mix of good and bad earnings reports from big companies, with UPS posting a 4 percent profit decline and fast-foot outlet Wendy's beating Wall Street expectations. The Dow Jones industrial average was up 51 points at 15,593, an increase of 0.3 percent. The Standard & Poor's 500 index climbed more than two points to 1,697. The Nasdaq was up five points to 3,605.

Earlier, Asian and European markets had risen after Chinese Premier Li Keqiang vowed that the government would not let economic growth slip below 7 percent.

China's Shanghai Composite jumped 2 percent to 2,043.88 and Hong Kong's Hang Seng surged 2.3 percent to 21,915.42.

Analysts said the previous day's downbeat news on the U.S. economy was double-edged for financial markets.

On one hand, the surprising drop in sales of existing homes in June to a seasonally adjusted annual rate of 5.08 million dampened optimism about the U.S. economic recovery. But investors could also interpret the weak data as ensuring continued bond-buying by the Federal Reserve. The bond-buying has been keeping market interest rates low in recent years, helping investors raise cheap money to invest in assets like stocks.

Japan's Nikkei 225 rose 0.8 percent to 14,778.51, its second day of gains since Prime Minister's Shinzo Abe's ruling coalition gained control of the upper house in weekend elections. That could make it easier for Abe's administration to implement reforms aimed at lifting the world's No. 3 economy out of its long slump.

In currency markets, the dollar rose to 99.78 yen from 99.32 yen. The euro rose to $1.3209 from $1.3186.

Benchmark crude for September delivery was down 16 cents to $106.78 a barrel in electronic trading on the New York Mercantile Exchange.

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Youkyung Lee in Seoul, South Korea, contributed to this report.


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