Friday, 18 November 2011

Economic data mixed, markets fall

Economic reports on Thursday were mixed.

In the US, applications for jobless benefits decreased 5,000 to 388,000 in the week ended 12 November. Housing starts fell 0.3 percent in October but this was much better than economists had expected, and building permits jumped 10.9 percent. However, the Federal Reserve Bank of Philadelphia’s general economic index decreased to 3.6 in November from 8.7 last month.

In the UK, retail sales unexpectedly rose 0.6 percent in October but Nationwide's consumer confidence index fell 9 points to 36 in October.

Markets were mostly weak on Thursday. Bloomberg reports:

U.S. stocks and commodities slid and the euro erased an earlier gain as concern grew that Europe’s debt crisis will worsen and lawmakers will fail to agree on plans to cut the American deficit. Treasuries gained.

The Standard & Poor’s 500 Index lost 1.7 percent to close at 1,216.13 at 4 p.m. in New York, with losses accelerating as it fell below levels watched by traders including its average over the past 100 days. The euro was little changed at $1.3459 after climbing as much as 0.6 percent. The S&P GSCI Index of commodities slid 2.9 percent, the most since September, as silver and gasoline tumbled at least 4.5 percent.

Concerns over contagion in Europe's debt crisis remain elevated after Spain and France had to pay higher yields at their latest debt auctions.

Spain sold 3.56 billion euros ($4.8 billion) of 10-year bonds at 6.975 percent, while France sold 3.33 billion euros of 2016 notes yielding 2.82 percent. Demand at Spain’s auction was 1.54 times the amount sold, the lowest since 2008, according to data compiled by Bloomberg.

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