European stocks fell on Friday. The STOXX Europe 600 Index fell 0.7 percent to close at 246.58.
Economic news out of Europe on Friday had been negative. Ifo's German business climate index fell to 105.3 in June, the lowest reading since March 2010, from 106.9 in May. Italy's consumer confidence index fell to 85.3 in June, the lowest since the data series began in 1996, from 86.5 in May.
Despite signs of a weakening economy, German Chancellor Angela Merkel continues to show reluctance to a quick bailout of the eurozone's indebted economies. From Bloomberg:
There was little sign at the four-way press conference that Merkel backed a more flexible use of the existing bailout mechanism. Asked why she opposed the euro bailout fund directly recapitalizing Spanish banks, the German leader repeated that “liabilities and controls go together.”Merkel said she can’t support German taxpayer money being channeled directly to a Spanish bank “because I have no powers” of oversight. “I’m the German chancellor; I can tell my banks that. You would have a huge problem here,” she said.
However, pressure from financial markets eased anyway on Friday as Spanish yields fell again. Spanish 10-year yields dropped 23 basis points to 6.38 percent.