Friday, 1 February 2013

Stocks fall after good month amid mixed economic data

Stocks fell on the last trading day of January but had a good month nevertheless. The MSCI All-Country World Index increased 4.5 percent over the past month, its best January since 1994.

Economic data on Thursday were mixed.

In the US, the MNI Chicago Report’s business barometer rose to 55.6 in January, the highest since April, from 50.0 in December. Personal income rose 2.6 percent in December, the biggest increase in eight years. However, consumer spending rose a more modest 0.2 percent. Also, initial claims for state unemployment benefits increased 38,000 last week to 368,000 after having hit their lowest in five years the previous week.

In Japan, industrial production rose 2.5 percent in December. A survey of manufacturers released with the data showed that producers expected further increases of 2.6 percent and 2.3 percent for January and February respectively. However, the December increase still fell short of analysts' expectations and left factory output down 1.9 per cent in the October-December quarter from the previous quarter.

In Germany, unemployment fell by 16,000 in January, taking the jobless rate down to 6.8 percent. However, retail sales fell 1.7 percent in December. Inflation cooled to 1.7 percent in January.

There were encouraging signs for the UK economy though. GfK NOP's consumer confidence index rose to -26 in January from -29 in December. House prices rose 0.5 percent in January, according to a report from Nationwide.

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