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While you were sleeping: Euro-zone GDP stalls

While you were sleeping: Euro-zone GDP stalls

Aug 15 (BusinessDesk) - Equities on both sides of the Atlantic advanced amid expectations that central banks will remain more accommodating than previously expected to help spur the pace of recovery and counter the impact of international conflict.

In late afternoon trading in New York, the Dow Jones Industrial Average rose 0.31 percent, the Standard & Poor’s 500 Index increased 0.29 percent, while the Nasdaq Composite Index added 0.24 percent.

Gains in shares of Pfizer and Boeing, up 1.9 percent and 1.8 percent respectively, led the increase in the Dow.

Shares of Cisco bucked the trend, down 2.5 percent, for the biggest percentage decliner in the Dow. The company reported its latest quarterly results after the market close on Wednesday, disappointing investors and showing that CEO John Chambers is struggling to revamp the business.

Cisco also said on Wednesday that it would cut about 6,000 jobs, adding on Thursday that that would cost about US$700 million.

Wal-Mart on Thursday downgraded its full-year profit forecast, citing “incremental investments in e-commerce and higher US health-care costs than previously anticipated.” Shares of Wal-Mart last traded 0.4 percent higher at US$74.33.

“As it relates to our challenges in the quarter, we wanted to see stronger comps in Walmart US and Sam’s Club, but both reported flat comp sales,” Doug McMillon, CEO of Wal-Mart Stores, said in a statement. “Stronger sales in the US businesses would’ve also helped our profit performance.”

Meanwhile the latest US jobs data were better than anticipated. A Labor Department report showed that the number of Americans filing for state unemployment benefits rose 21,000 to a seasonally adjusted 311,000 for the week ended August 9.

"Today's report continues to signal a solid labour market that is experiencing a very low pace of layoffs," Omair Sharif, senior economist at RBS in Stamford, Connecticut, told Reuters.

In Europe, the Stoxx 600 ended the session with a 0.3 percent advance from the previous close, as did France’s CAC 40 and Germany’s DAX. The UK’s FTSE 100 Index rose 0.4 percent.

Expectations for additional monetary stimulus from the European Central Bank grew after the latest data on euro-zone gross domestic product showed the region’s growth stalled in the three months through June, after growing 0.2 percent in the first quarter.

The economy in Germany, the euro-zone’s engine economy, shrank more than expected in the second quarter, contracting 0.2 percent. GDP also contracted in France and Italy.

“There’s a lot of concern about whether the European Central Bank is going to do more on the easing side to get the economy going,” Thomas di Galoma, head of fixed-income rates at ED&F Man Capital Markets in New York, told Bloomberg News. “The economics in Europe have been lagging.

In a speech in Crimea, President Vladimir Putin struck a more conciliatory tone than he has recently in saying Russia was keen to remain open for business. Still, there were reports that a convoy of “humanitarian” trucks was edging closer to eastern Ukraine where pro-Moscow rebels were retreating amid advancing Ukrainian troops.

(BusinessDesk)

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