European Markets Fell On Concerns Over Fed Tapering

(RTTNews) - The European markets finished to the downside Thursday, following nearly a full week of gains. The markets took a cue from the poor performance in Asia at the outset of trading and investor concerns over the timing of the Federal Reserve's stimulus tapering added to the negative mood. With U.S. weekly jobless claims falling to their lowest level in almost six years, investors are worried that the Bank's stimulus tapering could come soon.

St. Louis Federal Reserve Bank President James Bullard, who has supported bond purchases by the Fed, said Wednesday that ''caution is warranted in taking policy action based on forecasts alone.''

Eurozone's economy is on track for further modest expansion in the third quarter, though growth will remain constrained by a number of factors, IHS Global Insight's Chief European and UK Economist Howard Archer said.

Eurozone economy may keep expanding, though growth will be limited, he said. Reduced fiscal tightening in many countries, extended low inflation, an eventual stabilization of labor markets and gradually strengthening global growth should help Eurozone activity to gradually improve during 2014, Archer noted.

The Euro Stoxx 50 index of eurozone bluechip stocks declined by 0.64 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 1.06 percent.

The DAX of Germany dropped by 0.73 percent and the CAC 40 of France fell by 0.51 percent. The FTSE 100 of the U.K. decreased by 1.61 percent and the SMI of Switzerland lost 1.50 percent.

In Frankfurt, Utility RWE declined by another 3.00 percent, a day after reporting unimpressive results.

ThyssenKrupp fell by 1.05 percent. Barclays downgraded the stock to ''Underweight'' from ''Marketweight.''

Nomura initiated Gea Group with a ''Buy'' rating. The stock dipped by 0.13 percent.

In London, Antofagasta finished lower by 4.27 percent. JPMorgan downgraded the stock to ''Neutral'' from ''Overweight.''

Rio Tinto lost 2.83 percent, after the miner announced that it plans to cut 1,700 jobs.

Morgan Stanley downgraded AstraZeneca and GlaxoSmithKline to ''Underweight'' from ''Equalweight.'' AstraZeneca dropped by 1.72 percent, while GlaxoSmithKline lost 1.46 percent.

AZ Electronic Materials decreased by 3.88 percent. The specialty chemicals maker reported lower first-half profit and said it sees soft demand in the second half.

Imperial Tobacco, which released a trading statement, advanced by 2.46 percent.

BT Group finished unchanged. The company announced a three-year deal with Virgin Media to ensure that Virgin Media TV's customers can have full access to the BT Sport TV channels.

Ophir Energy plunged by 15.00 percent, after it reported a loss for the first half of the year.

Zurich Insurance, which reported lower quarterly profit, fell 4.09 percent in Zurich.

Holcim increased by 0.64 percent. The Swiss cement giant reported higher profit for the first half of the year, even as sales declined amid weak construction activity. It also reported a significant cut in debt and confirmed its full-year goals.

British retail sales growth accelerated more-than-expected in July as the heatwave boosted food store sales, data showed Thursday. Including automotive fuel, retail sales volume advanced 1.1 percent from the prior month, following a 0.2 percent rise in June, the Office for National Statistics said. Sales grew for the third month and the rate of growth was expected to rise moderately to 0.7 percent.

First-time claims for U.S. unemployment benefits fell by more than expected in the week ended August 10th, according to a report released by the Labor Department on Thursday, with jobless claims falling to their lowest level in almost six years.

The report said initial jobless claims fell to 320,000, a decrease of 15,000 from the previous week's revised figure of 335,000. Economists had expected jobless claims to edge down to 330,000 from the 333,000 originally reported for the previous week.

Consumer prices in the U.S. rose in line with economist estimates in the month of July, the Labor Department revealed in a report on Thursday, with the modest price growth reflecting higher prices for shelter, gasoline, apparel, and food.

The Labor Department said its consumer price index rose by 0.2 percent in July following a 0.5 percent increase in June. The modest increase in prices matched economist estimates.

While the Federal Reserve Bank of New York released a report on Thursday showing that conditions for New York manufacturers continued to see modest improvement in the month of August, the index of regional manufacturing activity unexpectedly decreased compared to the previous month.

The New York Fed said its general business conditions index dipped to 8.2 in August from 9.5 in July. A positive reading indicates growth in regional manufacturing activity, but economists had expected the index to climb to a reading of 10.0.

With a steep drop in utilities output offsetting a jump in mining output, the Federal Reserve released a report on Thursday showing that U.S. industrial production came in unchanged in July.

The Federal Reserve said industrial production was unchanged in July after rising by a downwardly revised 0.2 percent in June. Economists had expected production to increase by 0.3 percent, matching the growth originally reported for the previous month.

After reporting a significant improvement in regional manufacturing activity in the previous month, the Federal Reserve Bank of Philadelphia released a report on Thursday showing that manufacturing activity expanded at a much slower than expected rate in the month of August.

The Philly Fed said its diffusion index of current activity dropped to 9.3 in August from 19.8 in July. While a positive reading indicates continued growth in regional manufacturing activity, economists had expected a more modest decrease to a reading of 15.0.

Homebuilder confidence in the U.S. has unexpectedly seen a continued improvement in the month of August, the National Association of Home Builders revealed in a report on Thursday, with the index of homebuilder confidence rising to its highest level in nearly eight years.

The report said the NAHB/Wells Fargo Housing Market Index rose to 59 in August from a downwardly revised 56 in July. Economists had expected the index to edge down to 56 from the 57 originally reported for the previous month.