Thursday July 2, 02:45 PM
Europe shares down after U.S. jobless tally rises
By Brian Gorman
LONDON, July 2 (Reuters) - European shares fell further in
afternoon trade on Thursday after new data showed U.S. employers
cut 467,000 jobs in June, far more than expected and increasing
the U.S. unemployment rate to
9.5 percent.
At 1300 GMT the pan-European FTSEurofirst 300 index
was down 1.8 percent at 850.26 points after hitting the
session's low of 849.27. The benchmark index jumped 1.8 percent
on Wednesday.
Investors were also digesting ECB President Jean-Claude
Trichet's news conference after the European Central Bank held
euro zone interest rates at 1.0 percent and markets expect it to
hold them at the all-time low for much of next year to help
repair the region's economy.
Earlier Sweden's central bank shocked markets by cutting its
interest rates by a further 25 basis points to 0.25 percent.
The heavyweight banking sector took most points off the
index. BNP Paribas (Paris: FR0000131104 - news) , Banco Santander (Madrid: BSCH.MC - news) ,
Commerzbank (Xetra: 803200 - news) , Credit Suisse, Societe Generale (Paris: FR0000130809 - news) , UBS (Virt-X: UBSN.VX - news) and UniCredit (Milan: UCG.MI - news) were down
between 1 and 5.3 percent.
In the United States, data showed a labour market continuing
to struggle with a deep recession. The June job losses were more
than 100,000 greater than the 363,000 consensus forecast of Wall
Street economists polled by Reuters and broke a four-month trend
of moderation in job losses.
'The U.S. unemployment rate continues to creep towards the
10 percent mark. As long as jobs are lost it's difficult to see
a near-term end to this recession,' said Manoj Ladwa, senior
trader at ETX Capital in London.
'The reported figure has taken the market by surprise and
will throw cold water on any talks of a recovery.'
After a steep rise since early March, the European benchmark
index has traded choppily in a narrow range since mid-June, as
has the U.S. S&P 500 index.
ENERGY SHARES FALL
Energy shares fell after a bigger than expected rise in U.S.
gasoline stocks and renewed global financial weakness concerns
pushed the crude oil price below $68 a barrel.
BP, Royal Dutch Shell (Amsterdam: RDSA.AS - news) and Total
fell between 1.6 and 3 percent.
But Repsol shares rose 2.7 percent after the
Spanish oil major said it had received several offers for a
stake in its Argentine unit, YPF.
Shares in Irish drugs company Elan Corp soared 26
percent after Johnson & Johnson said it would take over
most of the company's Alzheimer's research and invest $1 billion
in new shares. J&J will get an 18.4 percent stake in Elan (Dublin: DRX.IR - news) .
Futures for the Dow Jones (news) , S&P 500 and Nasdaq (NASDAQ: news) were down between 0.8 and 1.3 percent.
(Editing by Greg Mahlich)
============================================================= For rolling updates on what is moving European shares please click on ============================================================= For pan-Europeanmarket data and news, click on codes in brackets: European Equities speed guide................... FTSEurofirst 300 index.............................. DJ STOXX index...................................... Top 10 STOXX sectors........................... Top 10 EUROSTOXX sectors...................... Top 10 Eurofirst 300 sectors................... Top 25 European pct gainers....................... Top 25 European pct losers........................ Main stock markets: Dow Jones............... Wall Street report ..... Nikkei 225 (news) ............. Tokyo report............ FTSE 100............... London report........... Xetra DAX............. Frankfurt market stories CAC-40................. Paris market stories... World Indices...................................... Reuters survey of world bourse outlook.......... Western European IPO diary........................... European Asset Allocation......................... Reuters News at a Glance (GLCE.PK - news) : Equities............... Main currency report:............................... Keywords: MARKETS EUROPE STOCKS/ =2
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