By Andrea Tryphonides
European stocks ended mostly higher Thursday, as investors remained mindful and wary ahead of the release of the August employment report in the U.S. on Friday, which suppressed any significant rises in the main bourses or the euro.
The Stoxx Europe 600 index fell a fraction of a point to 258.18. The U.K.'s FTSE 100 closed up 0.1% at 5371.04, France's CAC-40 closed 0.2% higher at 3631.43 and Germany's DAX finished flat at 6083.85. At the close of European equity markets, the Dow Jones Industrial Average was up 0.1% at 10274.24.
U.S. weekly jobless claims released Thursday continued to suggest a slow jobs recovery, adding to worries ahead of the August employment data due Friday early in New York. The number of U.S. workers filing new claims for jobless benefits edged down by 6,000 last week, a greater-than-expected decline, but the level of claims continues to remain high warned analysts.
On Friday, nonfarm payrolls for August are expected to drop by 98,000 according to consensus estimates collated by FactSet, while unemployment is expected to nudge up to 9.6% from 9.5%.
Even the session's positive fundamental data points failed to dent the focus on the U.S. job market. An unexpected rise in U.S. pending home sales in July helped move stocks in Europe off lows initially, although the National Association of Realtors said the foundation for a firm recovery was not yet in place. Teunis Brosens , economist at ING Bank NV, said, "The truth is that sales are still scraping the barrel."
Also, the main European bourses were static after a positive revision to second quarter gross domestic product to 1.9% from the flash estimate of 1.7%. But U.K. PMI construction data for August prompted a negative response from the FTSE 100 and a fall in sterling. The index fell to its weakest level since February, providing further evidence of moderating housing activity in the U.K.
Meanwhile, the euro edged up a touch following a successful auction of Spanish government debt and as the European Central Bank kept its benchmark interest rate unchanged at a record low of 1%, as expected. The ECB's growth forecasts were also revised upward, while liquidity measures were extended due to continued uncertainties in the economy.
At 1550 GMT, the euro was up 0.1% at $1.2818, while the British pound fell 0.4% to $1.5394, hurt by the downbeat U.K. data.
In other asset classes, the most actively traded gold contract, for December delivery, was up $5.60, or 0.5%, at $1,253.70 an ounce at the close of European equity markets. Gold futures pared gains after the stronger-than-expected U.S. jobless-claims reading, but market skittishness and a weaker dollar helped the yellow metal maintain positivity. But light, sweet crude for October delivery was down $0.23 or 0.3% at $73.68 on the New York Mercantile Exchange, following the session's mixed economic news.
In major market action: Telecom shares and major banks were leading decliners in Europe. Deutsche Bank /zigman2/quotes/203042512/composite DB +1.46% shed 3.2% in Frankfurt, and Allied Irish Banks /zigman2/quotes/207099435/composite AIB -0.08% dropped 2.6% in Dublin.
Deutsche Telekom /zigman2/quotes/205973137/delayed DE:DTE +0.80% fell 1%. The telecom is reportedly due to lose exclusivity for Apple /zigman2/quotes/202934861/composite AAPL -3.36% Inc's iPhone in Germany ahead of the Christmas holiday shopping season, according to Dow Jones Newswires.
In France, Pernod Ricard /zigman2/quotes/204974112/delayed FR:RI -1.88% , the producer of wines and liquors, reported a marginal rise in fiscal 2010 net income, while sales dipped 1.7%. Shares fell 2.4% in Paris. Also in the beverage sector, shares of Heineken N.V. /zigman2/quotes/205347870/delayed NL:HEIA -1.57% dropped 2.1% in Amsterdam.
Shares of Capgemini rose 1.2% on news the consulting, technology and outsourcing group acquired a 55% stake in Brazilian information-technology company CPM Braxis.
Barbara Kollmeyer contributed to this article.
Write to Andrea Tryphonides at firstname.lastname@example.org