Friday, 20 April 2012

Markets fall as economic data disappoint

The Spanish and French governments both successfully sold bonds on Thursday.

However, that did not stop European stocks and bonds from falling. The STOXX Europe 600 Index fell 0.5 percent, with Spain’s IBEX 35 Index tumbling 2.4 percent to extend a three-year low.

Not helping markets was an unexpected decline in the eurozone consumer confidence index to minus 19.8 in April from minus 19.1 in March.

US stocks also fell on Thursday. The S&P 500 Index declined 0.6 percent.

Disappointing US economic data undoubtedly soured market sentiment. Initial jobless claims fell by 2,000 to 386,000 in the week ended 14 April from 388,000 the prior period but was much higher than the consensus forecast of 370,000. Existing home sales fell 2.6 percent in March. The Federal Reserve Bank of Philadelphia’s general economic index decreased to 8.5, the lowest level since January, from 12.5 in March.

It was not all negative for the US economy though. The Conference Board's index of leading indicators rose 0.3 percent in March.

Another encouraging report on Thursday came from Japan. Exports there rose 5.9 percent in March, the fastest pace in a year. Imports also rose sharply by 10.5 percent, leaving Japan with a trade deficit of 82.6 billion yen for March.

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