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While you were sleeping: US, EU data disappoints


But the outlook for the world's biggest economy remains upbeat, even though the latest figures fall short of expectations.

Margreet Dietz
Wed, 11 Jul 2018

Momentum helped lift Wall Street to records earlier in the day, even as US and European economic data disappointed some investors about the pace of the recovery.

The Dow Jones Industrial Average climbed to a record high of 15,301.34, while the Standard & Poor's 500 Index hit a record 1661.49 in morning trading before giving up some of those gains as the day progressed.

In afternoon trading in New York, the Dow edged 0.03 percent higher, while the S&P 500 was last up 0.20 percent. The Nasdaq Composite Index fell 0.25 percent.

The outlook for the world's biggest economy remains upbeat, even though the latest data fell short of expectations. Manufacturing in the New York region posted a surprise contraction last month, while a separate report showed a bigger-than-expected decline in US industrial production in April.

"We've seen the pace of growth ebb and flow in the past and I think investors may be getting more used to the fact that there are going to be pauses and it's not too surprising we're seeing one now," Kate Warne, investment strategist of St Louis-based Edward Jones, told Reuters.

A decline in shares of Hewlett-Packard, last down 3.4 percent, weighed on the Dow. Shares of Apple also dropped, last down 4.4 percent, after reports showed that more hedge funds pared their holdings in the iPhone maker.

The latest earnings received mixed responses. Shares of Macy's gained 2.2 percent as the department store posted profit that beat expectations.

"I do think these guys [Macy's] continue to take share from the JC Penney's of this world and the Kohl's of the world," Edward Jones analyst Brian Yarbrough told Reuters.

However, shares of Deere & Co sank 4.6 percent as the company lowered its forecast for full-year equipment sales.

In Europe, the benchmark Stoxx 600 Index gained 0.8 percent. The UK's FTSE 100 rose 0.1 percent, Germany's DAX increased 0.3 percent and France's CAC 40 added 0.4 percent.

There was good news from the UK as Bank of England governor Mervyn King said an economic recovery for the country is "in sight". In its quarterly Inflation Report, the central bank forecast the economy will expand 0.5 percent in the second quarter, from 0.3 percent in the first three months of 2013.

But the state of the eurozone remains worrisome. A report today showed that the region's economy contracted more than expected in the first quarter as gross domestic product dropped 0.2 percent. It is the sixth quarter in a row that the eurozone economy has shrunk.

"The misery continues," Carsten Brzeski, a senior economist at ING in Brussels, told Reuters. "Almost all core countries bar Germany are in recession and so far nothing has helped in stopping this downward spiral."

(BusinessDesk)

Margreet Dietz
Wed, 11 Jul 2018
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While you were sleeping: US, EU data disappoints
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