Eurozone industrial orders rise, US existing home sales plunge

European economic indicators released on Tuesday were positive.

Bloomberg reports that industrial orders in the euro area rose in June.

European industrial orders rose more than economists forecast in June as strengthening global growth helped fuel the region’s fastest expansion in four years in the second quarter.

Orders in the 16-nation euro area increased 2.5 percent from May, when they jumped 4.1 percent, the European Union’s statistics office in Luxembourg said today. Economists had forecast orders to rise 1.5 percent, the median of 17 estimates in a Bloomberg News survey showed. In the year, June industrial orders rose 22.6 percent after a 23 percent gain in May.

In addition, the National Bank of Belgium's business confidence index rose to minus 5.1 in August from minus 6.5 in July.

Europe's economic outlook, however, continues to be threatened by sovereign debt issues, the latest of which is a downgrade of Ireland's sovereign credit rating by Standard & Poor's. Bloomberg reports:

Ireland’s long-term sovereign credit rating was cut one step to AA- from AA by Standard & Poor’s, which cited the projected cost of supporting the nation’s financial sector.

“The negative outlook reflects our view that a further downgrade is possible if the fiscal cost of supporting the banking sector rises further, or if other adverse economic developments weaken the government’s ability to meet its medium- term fiscal objectives,” S&P said today in a statement.

On Tuesday, the spread between Irish and German 10-year bond yields had widened to a record 318 basis points.

In the US, the report of a sharp fall in existing home sales in July was the focus of attention. From Bloomberg:

Sales of existing houses plunged by a record 27 percent in July as the effects of a government tax credit waned, showing a lack of jobs threatens to undermine the U.S. economic recovery.

Purchases plummeted to a 3.83 million annual pace, the lowest in a decade of record keeping and worse than the most pessimistic forecast of economists surveyed by Bloomberg News, figures from the National Association of Realtors showed today in Washington. Demand for single-family houses dropped to a 15- year low and the number of homes on the market swelled.