Stocks shrug off gloomy data

Wednesday's economic data continued to be gloomy.

Bloomberg reports the dismal figures from the euro area.

European services shrank at a record pace and retail sales fell more than forecast, increasing pressure on the European Central Bank to cut interest rates further this week.

Royal Bank of Scotland Group Plc’s services index dropped to 42.5 in November from 45.8 in October, remaining below the expansion-threshold of 50 for a sixth straight month. Separate figures show retail sales declined 2.1 percent in October from a year earlier, the biggest drop since June.

It was a similar picture in the UK. From Reuters:

Britain's dominant services sector shrank in November at its fastest pace since the series began in 1996 as new business, employment and confidence fell at record rates, a survey showed on Wednesday...

The Chartered Institute of Purchasing and Supply/Markit purchasing managers' index for the sector fell to 40.1 last month from 42.4 in October. That was below the consensus forecast of 41.2 and marked the seventh month below the growth threshold of 50.

UK consumer sentiment is also weak. Reuters reports:

The Nationwide Building Society's consumer confidence index fell six points last month to 50, the lowest reading since the survey started in May 2004.

And it is also the same picture across the Atlantic. From Bloomberg:

Service industries in the U.S. contracted the most in at least 11 years, and a measure of private payrolls showed job losses accelerated, signaling the economy’s decline deepened last month.

The Institute for Supply Management’s index of non- manufacturing businesses, which make up almost 90 percent of the economy, fell to 37.3 in November, the lowest level since records began in 1997. ADP Employer Services said companies eliminated 250,000 jobs, the most since November 2001...

The Federal Reserve’s regional economic survey showed the economy weakened across all its 12 districts as it became tougher to get credit. Retail sales, tourism spending and manufacturing declined in most places, housing markets were “weak” and commercial real estate “weakened broadly,” the Fed said today in its Beige Book release, published two weeks before officials meet in Washington to set interest rates...

Challenger, Gray & Christmas Inc., a Chicago-based placement firm, said today the number of announced firings surged 148 percent last month from November 2007, led by a jump at financial firms.

But stocks are proving resilient in the face of such gloomy data. Bloomberg reports that stocks rose in Europe on Wednesday.

European stocks rose for a second day as speculation central banks will step up efforts to revive the economy outweighed concern a deepening recession will stifle profit growth...

The Dow Jones Stoxx 600 Index added 0.6 percent to 198.29, erasing earlier declines of as much as 2.5 percent...

National benchmarks rose in 14 of the 18 western European markets today. The FTSE 100 added 1.1 percent. France’s CAC 40 gained 0.4 percent, and Germany’s DAX climbed 0.8 percent.

And in the US:

U.S. stocks rose for a second day as a jump in online spending and a record increase in mortgage applications lifted retailers and banks, overshadowing concern the worsening recession will reduce demand for commodities...

The Standard & Poor’s 500 Index climbed for the seventh time in eight days, rallying 2.6 percent to 870.74 after earlier sliding as much as 2.5 percent. The Dow Jones Industrial Average added 172.6, or 2.1 percent, to 8,591.69. The Nasdaq Composite increased 2.9 percent to 1,492.38. Almost three stocks rose for each that fell on the New York Stock Exchange.

However, crude oil continued on its downtrend. Bloomberg reports:

Crude oil fell after an Energy Department report showed that U.S. refineries curbed operating rates as the recession crimps fuel demand...

Crude oil for January delivery fell 17 cents, or 0.4 percent, to $46.79 a barrel at 2:42 p.m. on the New York Mercantile Exchange, the lowest settlement since Feb. 9, 2005. Futures have tumbled 68 percent since reaching a record $147.27 on July 11.

And copper fell to the lowest since July 2005, according to Bloomberg.

Copper futures for March delivery tumbled 4.6 cents, or 2.9 percent, to $1.5545 a pound on the Comex division of the New York Mercantile Exchange. Earlier, the price touched $1.516, the lowest for a most-active contract since July 7, 2005.