By Carla Mozee, MarketWatch
LONDON (MarketWatch) -- European stocks turned lower Monday,
with the region's benchmark pulling away from record highs, giving
up gains that followed the release of encouraging economic data
earlier in the session.
The Stoxx Europe 600 swung down by 0.2% to close at 391.29, as
energy, consumer goods and industrial shares traded in the red.
Stocks had been slightly higher earlier in the session after
data firm Markit's final February reading of manufacturing activity
data for the eurozone confirmed modest growth, with the purchasing
manufacturer's index holding steady at 51.0.
But following a strong run for European stocks as of late,
investors are seizing the opportunity to book gains ahead of the
European Central Bank's meeting on Thursday and the closely watched
monthly U.S. jobs report due Friday, said Fawad Razaqzada,
technical analyst, at Forex.com. The Stoxx 600 on Friday notched
its highest close since July 2007, and ended with a February
advance of 6.9%. The index also finished last week with its fourth
consecutive weekly advance.
"The low and negative interest rates in the eurozone are driving
investors to assets that have higher dividends" compared with other
assets, Razaqzada said. "Government bond yields are falling to
historically low levels and equities are the only asset at the
moment that are providing decent returns, helping to keep markets
elevated." Read: Italian bonds just marked an important milestone
(http://www.marketwatch.com/story/italian-bonds-just-marked-an-important-milestone-2015-02-27).
Also on Monday, the European Union's statistics agency said
consumer prices in the eurozone were 0.3% lower than in February
2014
(http://www.marketwatch.com/story/eurozone-jobless-rate-falls-to-lowest-since-2012-2015-03-02).
The decline was slower than a consensus projection of a drop of
0.4%. Eurostat also said the eurozone's unemployment rate fell to
11.2% in January from 11.3% in December, its lowest since April
2012.
"There are some optimistic economic signs emerging in Europe,
which won't in any way stop the ECB from easing," wrote Chris
Weston, chief market strategist at IG, in a note. "When combined
with a weakening euro, it almost seems like the perfect storm for
equity appreciation."
On the indexes Monday, Germany's DAX had slipped during the
session, but pulled out a win as it picked up 0.1%. Its finish at
11,410.36 marked the index's 20th record closing high of 2015.
The U.K.'s FTSE 100 , hurt by a nearly 8% slide in shares of
Tullow Oil PLC . The British blue-chip benchmark last week marked
its best closing level since December 1999.
France's CAC 40 fell 0.7% to 4,917.32. Media company Vivendi SA
fell 4.8% following a ratings downgrade at Nomura to neutral from
buy after Vivendi accepted Altice SA's offer to buy Vivendi's 20%
stake in Numericable-SFR.
Spain's IBEX 35 eked out a gain of less than 1 point at
11,178.50 after closing Friday's session as its highest level since
June 2011. Italy's FTSE MIB lost 0.2% at 22,297.60.
Losses among Greek banking shares weighed on Greece's Athex
Composite , which gave up 2.5% at 858.95. Spain's finance minister
said Monday that European Union and Greek officials are discussing
a third bailout for Greece
(http://www.marketwatch.com/story/greece-said-to-be-seeking-third-bailout-2015-03-02),
sized between EUR30 billion ($34 billion) and EUR50 billion.
The Athex on Friday closed February with its biggest monthly
gain since April 1998.
Among currencies, the British pound (GBPUSD) rose briefly after
Markit data showed the U.K. manufacturing purchasing manager's
index in February rose to 54.1, a seventh-month high and above a
FactSet- compiled projection of 53.2. But the pound eventually lost
steam against the dollar, buying $1.5361 compared with $1.5436 late
Friday in New York.
The euro (EURUSD) was buying $1.1181, down from $1.1197 on
Friday.
Subscribe to WSJ: http://online.wsj.com?mod=djnwires