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Aug. 24, 2018, 12:50 p.m. EDT

Europe stocks end mostly higher as Fed’s Powell strikes cautious tone

Italian shares lifted on unconfirmed report President Trump offered to buy country’s debt

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By Barbara Kollmeyer, MarketWatch


Reuters
Italian Prime Minister Giuseppe Conte.

European stocks ended flat to slightly higher Friday, breaking a three-week run of losses, after U.S. Federal Reserve Chairman Jerome Powell struck an evenhanded tone in a closely watched speech.

Meanwhile, some Italian banks got a lift after an unconfirmed report that President Donald Trump told the government he could buy some of the country’s debt.

How are the major benchmarks trading?

The Stoxx Europe 600 Index /zigman2/quotes/210599654/delayed XX:SXXP +1.58% rose less than 0.1% to close at 383.56, leaving it with a gain of 0.7% for the week and marking the first weekly rise in three weeks. U.S. stocks extended moderate gains after Powell’s speech, with the S&P 500 /zigman2/quotes/210599714/realtime SPX +1.59% returning to record territory.

The U.K.’s FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +2.09%  rose 0.2% to finish at 7,577.49, ahead of a three-day weekend, leaving it with a 0.3% weekly rise. Gains were led by major oil company BP PLC , up 1.1% and commodities giant Glencore PLC /zigman2/quotes/201400686/delayed UK:GLEN +3.22% , up 3.2%. Among the biggest drags were British American Tobacco PLC /zigman2/quotes/209116881/delayed UK:BATS +2.32% , which fell 3.4%. er 1% each.

Germany’s DAX /zigman2/quotes/210597999/delayed DX:DAX +1.64%  finished 0.2% higher at 12,394.52, leaving it up 1.5% for the week. Italy’s FTSEMIB Italy Index /zigman2/quotes/210598024/delayed IT:I945 +1.55%  ended 0.6% higher at 20,741.96, while the CAC 40 Index /zigman2/quotes/210597958/delayed FR:PX1 +1.49%  finished with a gain of 0.2% at 5,432.50.

Read: France’s stock market is poised for a ‘golden decade,’ Berenberg economist says

The euro /zigman2/quotes/210561242/realtime/sampled EURUSD +0.0442%  was higher against the dollar, trading at $1.1627, compared with $1.1544 late Thursday.

What’s moving the market?

In a speech at an annual central banking symposium in Wyoming, Powell said the Fed could stick with its planned, gradual pace of rate increases with no sign inflation will accelerate above the central bank’s 2% target.

Read: Ex-Wall Streeter Powell says Fed needs to nix old-time thinking, raise rates in small doses

In Italy, shares of Fiat Chrysler Automotive NV /zigman2/quotes/209202731/delayed IT:FCA +1.17%  rose 3.2% and several banks were higher, among them UniCredit SpA /zigman2/quotes/200769686/delayed IT:UCG +3.75%  up 1.1% and Unione di Banche Italiane /zigman2/quotes/200732627/delayed IT:UBI +4.20%  up 1%. Traders were eyeing a report in Italian daily Corriere della Sera that Trump offered to help the country out by buying some of its debt, in a meeting with the Italian Prime Minister Guiseppe Conte three weeks ago. The report prompted head-scratching among analysts, who said it was unclear how the U.S. government would go about such a process.

Italy, the third-largest economy in the eurozone, has become Europe’s latest worry, amid fears that its populist government may expand fiscal deficits more than expected through next year’s budget. That would pit the country against the fiscally conservative European Union.

In Germany, the Federal Statistical Office said Germany’s gross domestic product grew at a quarterly clip of 0.5% or an annualized rate of 1.8% in the second quarter. But economists voiced caution that global trade tensions and political risks could cloud the growth outlook.

Opinion: Gear up for a no-deal Brexit: 5 areas investors should watch

What stocks are in focus?

Shares of Swedish Match AB /zigman2/quotes/204812015/delayed SE:SWMA -0.53%  fell 5.4% leading the decliners in the Stoxx Europe 600. Analysts at Jefferies initiated coverage on the smokeless tobacco maker with a downbeat view on growth for the company.

Leading the gainers, Kingspain Group PLC /zigman2/quotes/200640650/delayed IE:KRX +3.60%  shot up more than 9% after the Ireland-based building-materials company reported higher first-half profit.

Shire PLC   was another leading gainer, rising 2% after the Food and Drug Administration approved a treatment by the pharmaceutical maker for a rare genetic disease that can cause life-threatening swelling.

/zigman2/quotes/210599654/delayed
XX : STOXX
371.21
+5.78 +1.58%
Volume: 0.00
July 6, 2020 11:03p
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/zigman2/quotes/210599714/realtime
US : S&P US
3,179.72
+49.71 +1.59%
Volume: 2.38B
July 6, 2020 5:22p
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/zigman2/quotes/210598409/delayed
UK : FTSE UK
6,285.94
+128.64 +2.09%
Volume: 681,521
July 6, 2020 4:59p
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/zigman2/quotes/201400686/delayed
UK : U.K.: London
175.14 p
+5.46 +3.22%
Volume: 22.16M
July 6, 2020 4:35p
P/E Ratio
N/A
Dividend Yield
0.00%
Market Cap
£22.42 billion
Rev. per Employee
£1.04M
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/zigman2/quotes/209116881/delayed
UK : U.K.: London
3,131.50 p
+71.00 +2.32%
Volume: 1.92M
July 6, 2020 4:35p
P/E Ratio
12.58
Dividend Yield
6.72%
Market Cap
£69.96 billion
Rev. per Employee
N/A
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/zigman2/quotes/210597999/delayed
DAX
DX : Xetra Indices
12,733.45
+205.27 +1.64%
Volume: 78,193
July 6, 2020 6:30p
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/zigman2/quotes/210598024/delayed
IT : Borsa Italiana
20,031.86
+305.21 +1.55%
Volume: 0.00
July 6, 2020 5:36p
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/zigman2/quotes/210597958/delayed
FR : France: Euronext Paris
5,081.51
+74.37 +1.49%
Volume: 88,535
July 6, 2020 6:05p
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/zigman2/quotes/210561242/realtime/sampled
US : Tullett Prebon
1.1315
+0.0005 +0.0442%
Volume: 0.0000
July 6, 2020 7:55p
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/zigman2/quotes/209202731/delayed
IT : Italy: Milan
9.00
+0.10 +1.17%
Volume: 13.91M
July 6, 2020 5:35p
P/E Ratio
26.29
Dividend Yield
0.00%
Market Cap
€17.96 billion
Rev. per Employee
N/A
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/zigman2/quotes/200769686/delayed
IT : Italy: Milan
8.74
+0.32 +3.75%
Volume: 22.70M
July 6, 2020 5:35p
P/E Ratio
6.02
Dividend Yield
0.00%
Market Cap
€18.84 billion
Rev. per Employee
€80,793
loading...
/zigman2/quotes/200732627/delayed
IT : Italy: Milan
3.20
+0.13 +4.20%
Volume: 11.47M
July 6, 2020 5:35p
P/E Ratio
13.85
Dividend Yield
0.00%
Market Cap
€3.49 billion
Rev. per Employee
€232,018
loading...
/zigman2/quotes/204812015/delayed
SE : Sweden: Stockholm
kr 671.20
-3.60 -0.53%
Volume: 314,011
July 6, 2020 5:29p
P/E Ratio
26.66
Dividend Yield
1.86%
Market Cap
kr104.92 billion
Rev. per Employee
kr2.47M
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/zigman2/quotes/200640650/delayed
IE : Ireland: Dublin
60.40
+2.10 +3.60%
Volume: 260,970
July 6, 2020 4:32p
P/E Ratio
29.77
Dividend Yield
0.22%
Market Cap
€10.57 billion
Rev. per Employee
€312,321
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Barbara Kollmeyer is an editor for MarketWatch in Madrid. Follow her on Twitter @bkollmeyer.

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