Saturday, 13 August 2011

Stocks rise again amid mixed economic data

Stocks managed to rise for a second consecutive day on Friday. Bloomberg reports:

U.S. stocks rose, capping a week of record swings for the Standard & Poor’s 500 Index, as an increase in retail sales tempered concern the economy is slowing. European shares extended a rebound from a two-year low after some nations banned short-sales. Treasuries gained.

The S&P 500, which fell or rose at least 4.4 percent in the previous four sessions, climbed 0.5 percent to 1,178.81 at 4 p.m. in New York to trim its weekly drop to 1.7 percent. The Stoxx Europe 600 Index jumped 3.7 percent as banks climbed for a second day, surging 4.5 percent as a group after sinking 6.7 percent on Aug. 10. The yield on the 10-year Treasury note fell nine basis points to 2.24 percent. The Swiss franc slid against all 16 major peers as the nation considers pegging it to the euro.

US economic data had been mixed. From Bloomberg:

Retail sales in the U.S. climbed in July by the most in four months, showing consumers were holding up at the start of the third quarter.

The 0.5 percent increase reported by the Commerce Department in Washington today followed a 0.3 percent gain in June that was larger than previously estimated...

The Thomson Reuters/University of Michigan preliminary index of consumer sentiment for August slumped to 54.9, the lowest reading since May 1980, from 63.7 the prior month...

In Europe, the strong rebound in stocks came despite weak economic data. From Bloomberg:

European industrial production unexpectedly fell in June and France’s economy stalled in the second quarter, adding to signs that growth is losing momentum as governments struggle to contain the debt crisis.

Production in the 17-nation euro area slipped 0.7 percent from May, the European Union’s statistics office in Luxembourg said today. In France, the economy failed to expand from the first quarter, according to Paris-based statistics office Insee, missing the median forecast of 0.3 percent growth in a Bloomberg News survey of 15 economists.

Even China is showing signs of slowing. From Reuters:

China's bank lending slowed more than expected in July to seven-month lows as Beijing kept a tight grip on monetary policy to quell near three-year-high inflation...

Chinese banks made 492.6 billion yuan ($77 billion) of loans in July, the People's Bank of China said on its website, a pull-back from 634 billion yuan lent in June...

Underlining the tightness in the banking system, China's broad M2 measure of money supply grew only 14.7 percent in July, the weakest pace of growth seen since April 2005, and again missing forecasts for a 15.8 percent growth.

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