Thursday May 8, 08:36 AM
Euroshares open lower after Wall Street decline; ECB and BoE in focus
LONDON (Thomson Financial) - Europe's leading exchanges lost ground in opening deals following a sharp decline on Wall Street overnight on the back of soaring oil prices, while European investors are expected to focus later in the day on interest-rate setting decisions by the European Central Bank and the Bank of England.
At 8:11 a.m., the DJ STOXX 50 was down 13.31 points, or 0.40 percent, to 3,273.19, while the DJ STOXX 600 lost 1.44 points, or 0.44 percent, to 327.91
On the other side of the Atlantic, Wall Street tumbled as the price of oil soared towards $124 per barrel and touched off concerns that the stock market's recent gains might have been premature as consumers grapple with rising energy and food costs.
While stocks pulled back, the day was not without good news. The U.S. Labor Department said labour costs rose at an annual rate of 2.2 percent during the first quarter.
The DJIA ended the day 206.48 points or 1.59 percent lower at 12,814.35, while the S&P 500 closed down 25.69 points or 1.81 percent at 1,392.57. The tech-laden Nasdaq (NASDAQ: news) was down 44.82 points or 1.80 percent at 2,438.49.
World (WRGR.TA - news) oil prices struck a fresh intra-day record of $123.87 a barrel in Asian hours on Thursday despite a bigger-than-expected rise in U.S. energy stocks.
Gold prices dipped Wednesday, as the stronger dollar reduced the precious metal's appeal as an alternative investment, and as oil prices eased. Other precious metals also eased.
In Europe, the interest-rate setting decisions by the European Central Bank and the Bank of England will be in focus.
'We are expecting it to be a slow morning as all eyes will be on the BoE and then later the EU central bank rate cut announcements. While no cut is expected, traders will be watching the language of the announcement for clues of what the bank is thinking of doing next,' said David Evans, market analyst at BetOnMarkets.com.
In corporate news, teh earnings season is in full swing.
Shares in Vallourec (Paris: FR0000120354 - news) slumped more than 6 percent in opening deals after its first-quarter earnings report, released Thursday night, missed expectations.
In response, Merrill Lynch (NYSE: MER - news) cut its stance on the stock to 'neutral' from 'buy', noting that the French steel tubes maker indicated that re-pricing of contracts outside the U.S. will only happen in 2009, later than the broker was expecting.
The news also weighed on sector peers such as Salzgitter, which fell 1.46 percent.
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