EUROPE MARKETS: European Stocks End Lower Amid Strong Factory Activity
August 23 2017 - 12:41PM
Dow Jones News
By Carla Mozee, MarketWatch
WPP shares fall 10% after ad giant cuts revenue growth view
European stocks slumped Wednesday, with investors assessing
fresh data on the health of the eurozone economy, as market
participants counted down to a key meeting of central bankers.
The Stoxx Europe 600 index lost 0.5% to close at 373.92, partly
erasing a 0.8% jump from Tuesday, when the benchmark ended a
three-session losing streak.
Equity investors appeared to be in a risk-off mood early
Wednesday after U.S. President Donald Trump said late Tuesday that
he's ready to shut down the government
(http://www.marketwatch.com/story/trump-threatens-shutdown-over-border-wall-funding-predicts-end-of-nafta-2017-08-22)
to win funding for a border wall with Mexico.
Trump, during a rally with his supporters in Arizona, also
warned of the possible termination of the North American Free Trade
Agreement.
"Today is a classic example of traders not having a major reason
to buy, so stocks drifted lower," said David Madden, market analyst
at CMC Markets in a note.
"Traders are in wait and see mode ahead of the Jackson Hole
symposium that starts tomorrow," he added.
Draghi speaks: Investors remained focused on the Kansas City
Federal Reserve Bank's central bank symposium in Jackson Hole,
Wyo., which starts Thursday and runs through Saturday. European
Central Bank President Mario Draghi will be a featured speaker on
Friday.
"The stakes are high for Mario Draghi during the Jackson Hole
Symposium as he is expected to avoid talking about tapering at this
point in an attempt to soften the euro but it will be virtually
impossible for him to successfully sidestep any questions regarding
the matter," said ADS Securities research Konstantinos Anthis in a
note.
On Wednesday, Draghi spoke at a gathering of Nobel Laureates at
the Lindau Meeting on Economic Sciences in Germany. Later, he will
travel to Jackson Hole.
PMI readings: The eurozone economy kept up its growth momentum
in August, according to data from IHS Markit, with a strong rise in
manufacturing activity offsetting a slowdown in services.
The preliminary reading of the eurozone composite purchasing
managers index was 55.8, a notch up from 55.8 in July. Analysts
polled by FactSet expected a reading of 55.7. The flash
manufacturing PMI came in at 57.4, up from 56.5 the previous month
and compared with expectations for 56.4. For services, the
preliminary PMI was at 54.9. That compares with 55.4 in July, the
same reading expected in the FactSet survey.
"The latest PMI readings for the eurozone signal a continuation
of the recent strong performance of the currency bloc's economy.
This stabilization in the rate of expansion is pleasing, following
signs of growth easing in recent months," Andrew Harker, associate
director at IHS Markit, said in the report.
The euro edged up to $1.1804, from around $1.1777 ahead of the
data and late Tuesday in New York.
Stock movers: WPP PLC (WPP.LN) (WPP.LN) shares dropped 11% after
the world's largest advertising company cut its forecast for growth
for 2017
(http://www.marketwatch.com/story/wpp-revenue-stutters-as-client-spending-drops-2017-08-23),
citing major slowdowns in key industries such as consumers-goods
and retail.
National indexes: Germany's DAX 30 index shed 0.5% to 12,174.30
and France's CAC 40 index lost 0.3% to 5,115.39.
The U.K.'s FTSE 100 index ended marginally higher at 7,382.65
(http://www.marketwatch.com/story/ftse-100-wobbles-as-wpp-shares-tumble-2017-08-23),
buoyed by a slide in the pound that fell to an almost eight-month
low against the euro at EUR1.0832.
Read:What could lift Germany's DAX out its summer slump
(http://www.marketwatch.com/story/germanys-dax-looks-set-to-rebound-from-its-summer-slump-says-capital-economics-2017-08-22)
(END) Dow Jones Newswires
August 23, 2017 12:26 ET (16:26 GMT)
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