By Sara Sjolin, MarketWatch
In February, private creditors suffered significant haircuts on their Greek bondholdings as part of the second bailout for the country. Read more about Greece
“Such [new] haircuts would be significant on two accounts. If the official sector takes losses, it would bring down the debt and make the Greek public financing more sustainable,” Ashley said.
“Secondly, in terms of future bailouts, the private sector would not be as scared if the official sector also would take haircuts, because the losses wouldn’t be as large.”
The Athens General Index /zigman2/quotes/210597948/delayed GR:GD +1.04% rose 0.5% to 586.26.
Elsewhere, shares of European Aeronautic Defence & Space Co. jumped 5.7%. The group raised its full-year outlook as second-quarter earnings rose sharply, beating forecasts.
Heading the other direction, French materials group Compagnie de Saint-Gobain SA /zigman2/quotes/201813666/delayed FR:SGO -0.90% gave back 11%, as it reported a 34% drop in first-half profit and said it expects the economic environment to remain tough in the back half of the year.
Also in Paris, Total SA rose 3.4%. The oil group said it remains confident about the second half of 2012 and reported a 2% rise in adjusted second-quarter profit. Total confident on second half as production falls
The CAC 40 index /zigman2/quotes/210597958/delayed FR:PX1 +0.20% rose 2.3% to 3,280.19, closing out the week with a 2.7% gain.
U.S. GDP data grab attention
U.S. data also grabbed market attention, as second-quarter gross domestic product came posted an annualized growth rate of 1.5%, beating analysts’ expectations of a 1.3% rise. In the first three months of the year, the economy grew by 2%.
The numbers were watched closely for signals that the slowing pace of the U.S. recovery would increase the likelihood of another round of quantitative easing, when the Federal Open Market Committee announces its policy decision next week.
“I don’t think this changes the game in any direction. It’s a gray area, where [the data] weren’t strong enough to rule out QE3 but not weak enough for it to be announced next week,” RBC’s Ashley said. “September is more likely for QE3.”
In addition, the final reading of the University of Michigan-Thomson Reuters July consumer sentiment for July came in slightly higher than forecast at 72.3. Final UMich sentiment edges up for July
U.S. stocks were higher on Wall Street.
In Europe, banks rallied, with Barclays PLC /zigman2/quotes/208409333/delayed UK:BARC -0.37% /zigman2/quotes/206581728/composite BCS -0.64% , up 8.7%, posting one of the biggest gains for the sector. The British bank reported underlying first-half profit above market expectations and apologized for the recent interest-rate-rigging scandal. Barclays says sorry, profit beats forecasts
The FTSE 100 index /zigman2/quotes/210598409/delayed UK:UKX +1.19% rose 1% to 5,627.21, but ended the week 0.4% lower. Miner Anglo American PLC /zigman2/quotes/201381512/delayed UK:AAL +1.63% weighed on the index, down 3.6%, after posting lower earnings in the first half of the year, dragged by a deterioration in the global economic outlook. Anglo American earnings fall, seeks lower risk
In Germany, the DAX 30 index /zigman2/quotes/210597999/delayed DX:DAX +0.72% rose 1.6% to 6,689.40, gaining 0.9% on the week. Deutsche Bank AG /zigman2/quotes/205584254/delayed DE:DBK -1.52% gained 3.1% and Commerzbank AG /zigman2/quotes/200193353/delayed DE:CBK +0.08% picked up 1.8%.
Specialty gases firm Linde AG /zigman2/quotes/203890251/delayed DE:LIN -0.87% advanced 3% after second-quarter earnings beat expectations.
Among other notable movers in Europe, Nokia Corp. /zigman2/quotes/207421390/composite NOK +0.63% jumped 8.7%.
Peer Samsung Electronics Co. said it widened its lead over Apple Inc. /zigman2/quotes/202934861/composite AAPL +0.17% in the smartphone market in the second quarter and increased its global market share. Samsung widens smartphone lead over Apple
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