Euro stocks fall as US economy contracts..Spain’s economy shrinks
EUROPEAN stock markets have slid and the euro has gained on news the US economy unexpectedly contracted in the fourth quarter last year and on bright eurozone confidence data.
In London, the FTSE 100 index of leading companies lost 0.25 per cent to 6,323.11 points, while in Frankfurt, the DAX 30 fell 0.47 per cent to 7,811.31 points, and in Paris the CAC 40 lost 0.54 per cent to 3,765.52 points.
In Milan, the FTSE Mib index was down 3.36 per cent at 17,290 points amid investor jitters over troubled bank Monte dei Paschi di Siena and disappointing results from oil services giant Saipem.
Madrid’s IBEX 35 index slid 0.82 per cent to 8,571.90 points on news that Spain’s growth shrank 0.7 per cent in the fourth quarter of 2012, as recession tightened its grip on the eurozone’s fourth-largest economy.
At the same time however, the European single currency spiked to $1.3563, buoyed by upbeat confidence data, compared with $1.3493 late on Tuesday in New York. Earlier in the session the euro reached $1.3578, its highest level since November 2011.
In Europe, the European Commission’s eurozone confidence index rose in January to 89.2 points — reaching a level last seen in June 2012. That marked the third successive monthly increase and compared with the December level of 87.8.
At midday on Wall Street, the Dow Jones Industrial Average was down 0.01 per cent, the S&P 500 lost 0.12 per cent, and the tech-rich Nasdaq Composite was virtually unchanged.
According to the government’s first estimate, the US economy contracted at a rate of 0.1 per cent in the fourth quarter, mostly due to defence spending cutbacks.
Total economic output slumped 0.7 per cent from the previous quarter, the steepest decline since the second quarter of 2009, after a 0.3 per cent dip the previous quarter.
The preliminary report by the National Statistics Institute showed the recession, which started in the final months of 2011, still tightening its grip on the eurozone’s fourth-largest economy.
Just days earlier, a separate report showed Spain’s unemployment rate shot to 26.02 per cent in the fourth quarter — the highest level since the re-birth of Spanish democracy after death of General Francisco Franco in 1975 — as 5.97 million people sought in vain for work.
Raj Badiani, economist at London-based research house IHS Global Insight, predicted another 0.5-per cent decline in gross domestic product in the first quarter of 2013 as households snap their purses shut.
“The outlook for the remainder of 2013 and 2014 is no better,” he said in a report.
Spain is wrecked..watching the dow closely with the call for a fall we put out last week..another small drop last night..i expect a run up next week leading into february 9th and the double top target..