European Markets Advanced On Janet Yellen's Dovish Comments

(RTTNews) - The European markets finished solidly in positive territory Thursday, bouncing back from the losses of the previous 2 sessions. Investor sentiment received a boost from dovish comments from Janet Yellen. The nominee to become the next Chairman of the Fed said unemployment is still too high to warrant tapering asset purchases, which eased investor concerns.

Federal Reserve Vice Chairman Janet Yellen, the nominee to lead the central bank for the next four years, to the U.S. Congress she supports the massive bond-buying program crafted by outgoing Chairman Ben Bernanke.

"We have made good progress, but we have farther to go to regain the ground lost in the crisis and the recession," Yellen said in remarks prepared for Thursday's confirmation hearing before the Senate Committee on Banking, Housing, and Urban Affairs.

Gains in manufacturing and housing have helped drive modest economic growth this year, but Yellen warned that unemployment remains too high for the Fed to consider significantly scaling back its $85 billion a month in asset purchases.

Germany's financial system is facing growing strain from the low-interest-rate environment and the new policy tools must be kept ready to be deployed when needed, the Bundesbank said on Thursday.

In the 2013 Financial Stability Review, the bank also said the European debt crisis is not yet over and remains a risk to financial system stability.

"The risk of contagion remains high," Bundesbank Executive Board member Andreas Dombret said. "It is a matter for concern for us that the ties between governments and domestic banks have tightened again in several countries."

Small and medium-sized enterprises in the euro area are experiencing a greater need for funds, but are finding it difficult to access them, results of a survey by the European Central Bank revealed on Thursday.

In its ninth report on the results of the "Survey on the access to finance of SMEs in the euro area", the ECB said finding customers and access to finance dominated the worries of the smaller firms between April and September. The firms also reported a "marginal deterioration in the availability of bank loans", the bank said.

"The net percentage of euro area SMEs reporting a deterioration in the availability of bank loans increased marginally (-11 percent, after -10 percent)," the survey report said.

Further, the rejection rates for euro area SMEs when seeking a loan rose to 12 percent from 11 percent. Small firms also reported an increase in interest rates offered to them.

"The survey results suggest that financing conditions for SMEs continue to differ significantly across euro area countries and are in general more difficult than those of larger companies," the ECB said.

The Euro Stoxx 50 index of eurozone bluechip stocks increased by 1.06 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.88 percent.

The DAX of Germany climbed by 1.05 percent and the CAC 40 of France advanced by 1.04 percent. The FTSE 100 of the U.K. rose by 0.54 percent and the SMI of Switzerland gained 0.85 percent.

In Frankfurt, Merck increased by 1.72 percent. The drug-maker reported a surge in third-quarter profit and lifted its annual profit target.

K+S, which reported third-quarter results, climbed by 4.14 percent.

Nordex advanced by 3.30 percent. The company reported higher profit for nine months with a 47 percent growth in sales.

RWE declined by 5.10 percent. The utility expects results in 2014 to fall sharply from projected figures for 2013. Peer E.ON lost 1.71 percent.

In Paris, Bouygues gained 6.23 percent. The builder reported an increased profit for the third quarter.

EADS rose by 1.89 percent, after the company modified its annual forecast.

In London, Antofagasta fell by 1.17 percent. The miner reported a 9.2 percent drop in nine-month group revenue.

Burberry, which reported an increased profit, advanced by 1.85 percent.

After issuing an interim management statement, insurer Prudential gained 1.85 percent.

J Sainsbury increased by 0.95 percent, after Citigroup upgraded it to "Buy" from "Neutral."

Ophir Energy surged by 9.16 percent. The Africa-focused independent oil and gas exploration business is selling a 20 percent stake in Tanzanian Blocks 1, 3 and 4 to Pavilion Energy of Singapore-based investment company Temasek for about $1.3 billion.

Serco Group plunged by 18.06 percent. The company sees adjusted operating profit for the year below market view.

Ahold dropped by 5.03 percent in Amsterdam. The supermarket chain reported lower profit from continuing operations for the third quarter.

UniCredit decreased by 0.58 percent in Milan. Goldman Sachs removed the stock from its Conviction Buy list.

The Eurozone economy managed to expand in the third quarter, flash estimates from Eurostat showed Thursday. Gross domestic product was up 0.1 percent, down from the 0.3 percent quarterly growth posted in the preceding three months. This was the second consecutive expansion and matched economists' expectations.

The German economy grew 0.3 percent quarter-on-quarter in the third quarter, matching economists' expectation, official data showed Thursday. However, economic growth decelerated from the 0.7 percent expansion seen in the second quarter, Destatis said.

The French economy shrank 0.1 percent in the third quarter from a quarter ago, preliminary results released by the statistical office Insee showed Thursday. Economists were expecting gross domestic product to remain flat, following the second quarter's 0.5 percent rebound.

France's EU harmonized inflation weakened in October to the lowest level in nearly four years, latest figures from statistical office Insee showed Thursday. The harmonized index of consumer prices (HICP) increased 0.7 percent on an annual basis in October, following the previous month's 1 percent rise. The outcome matched economists' forecast. The October growth rate was the lowest since November 2009.

U.K. retail sales volume dropped 0.7 percent month-on-month in October due to a notable 1.3 percent fall in non-food store sales, the Office for National Statistics said Thursday. The drop in sales volume follows a 0.6 percent rise in September. It was forecast to remain flat in October.

While the Labor Department released a report on Thursday showing a modest drop in initial jobless claims in the week ended November 9th, claims still came in above economist estimates. The report said initial jobless claims edged down to 339,000, a decrease of 2,000 from the previous week's revised figure of 341,000.

Economists had been expecting jobless claims to fall to 330,000 from the 336,000 originally reported for the previous week.

With the value of imports rising and the value of exports falling, the Commerce Department released a report on Thursday showing that the U.S. trade deficit widened by much more than expected in the month of September.

The report said the trade deficit widened to $41.8 billion in September from a revised $38.7 billion in August. Economists had expected the deficit to widen to $39.1 billion.

Labor productivity in the U.S. rose by less than expected in the third quarter, according to a report released by the Labor Department on Thursday, although the report also showed a bigger than expected decrease in unit labor costs.

The report said productivity increased by 1.9 percent in the third quarter compared to the 1.8 percent growth seen in the second quarter. Economists had expected productivity to jump by about 2.3 percent.

Meanwhile, the Labor Department said unit labor costs fell by 0.6 percent in the third quarter, offsetting the 0.5 percent increase seen in the second quarter. Labor costs had been expected to dip by 0.3 percent.