European Factors to Watch-Shares seen lower, focus on data

Fri May 17, 2013 2:39am EDT

LONDON, May 17 (Reuters) - European stocks were expected to edge lower on
Friday, mirroring losses on Wall Street, following comments from some U.S.
central bank officials saying the Federal Reserve could begin easing up its
monetary stimulus this summer.
    John Williams, president of the Federal Reserve Bank of San Francisco, said
on Thursday the Fed could end bond purchases later this year, Dallas Fed
President Richard Fisher said the Fed should withdraw its targeted support of
the housing sector now, while Philadelphia Fed president Charles Plosser said
the central bank should dial back its asset buying. 
    However, analysts said that losses in share prices could be limited as some
recent poor U.S. data might prompt the Fed to keep its stimulus measures in
place for a longer period than indicated by U.S. central bank officials.
    The Philadelphia Federal Reserve's figures on Thursday showed factory
activity in the mid-Atlantic region contracted and the Commerce Department
reported a 16.5 percent drop in U.S. housing starts in April. New claims for
jobless benefits also unexpectedly jumped last week. 
    "The stock market is driven by liquidity and sooner or later this must end,
but the Fed is not going to take any chances. They are going to clearly signal
the timing of retreat for the asset purchases, so the market won't be shocked,"
Koen De Leus, senior economist at KBC, in Brussels, said.
    "In the near term a correction would be healthy, but on the whole the market
is well supported by the huge amount of liquidity that is pumped into the system
by the central banks. There is not much that can derail this rally. Enjoy the
ride, but protect the downside."
    At 0635 GMT, futures for Euro STOXX 50, Germany's DAX and
France's CAC were 0.1 to 0.4 percent lower.
    The FTSEurofirst 300 index of top European shares ended flat at
1,245.45 points on Thursday after setting a new five-year high at 1,247.57. 
    However, the index, which is up nearly 10 percent so far this year, is
headed for its fourth straight weeks of gains.
    Investors will focus on more data later in the day for hints about the
market's near term direction. Thomson Reuters/University of Michigan will
release preliminary May consumer sentiment index at 1355 GMT, while the U.S.
Conference Board will release April leading economic indicators at 1400 GMT.
    
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  MARKET SNAPSHOT AT 0627 GMT:
    
                                                  LAST    PCT CHG   NET CHG
     S&P 500                                  1,650.47     -0.5 %     -8.31
     NIKKEI                                  15,138.12     0.67 %    100.88
     MSCI ASIA EX-JP                            558.55    -0.17 %     -0.93
     EUR/USD                                    1.2859    -0.17 %   -0.0022
     USD/JPY                                    102.47     0.22 %    0.2300
     10-YR US TSY YLD                            1.876         --      0.00
     10-YR BUND YLD                              1.327         --      0.00
     SPOT GOLD                               $1,381.70    -0.29 %    -$3.99
     US CRUDE                                   $95.21     0.05 %      0.05
 
  > Dollar firmer on Fed remarks, Asian shares mixed                 
  > Nikkei eases on wariness over recent steep gains, exporters suffer      
  > Wall Street slips after Fed comments, but Cisco surges                  
  > Prices gain on weak U.S. economic data, low inflation                 
  > Dollar near 10-mth high as Fed dove hints at QE wind-down             
  > Gold falls on stronger dollar, heads for worst week in a month        
  > Copper eyes first weekly drop in four on China woes                  
  > Brent slips towards $103 on demand growth worries, stronger dollar     
    
    COMPANY NEWS
    
    VOLKSWAGEN, DAIMLER, BMW 
    Europe's ailing car market snapped a streak of 18 straight months of
declines last month, expanding slightly thanks to robust demand in the UK,
calendar effects and a historically weak April last year, according to data from
ACEA. Related news 
    
    DEUTSCHE BANK, COMMERZBANK 
    Supervisors across the European Union will examine the way that top banks
classify and value loans and other assets to ensure that the stress tests they
conduct do a better job of finding any problems. 
    
    SIEMENS 
    Investors who had filed a legal complaint against Siemens spinning off its
lighting business Osram have withdrawn their lawsuit, according to a formal
announcement in the Electronic Federal Gazette, a publication of the German
Justice Ministry.
    Separately, Siemens's South African unit has won the contract to supply 46
wind turbines to power utility Eskom's 100 megawatt Sere wind farm, it said on
Thursday. 
    
    TELIASONERA 
    Sweden's biggest operator said it would invest around 5 billion crowns ($753
million) a year in its home market to 2015 to build out coverage and capacity in
its 4G and 3G networks across the country.
    
    NOVO NORDISK 
    The United States Food and Drug Administration (FDA) has imposed the Danish
insulin producer to tell on the packaging of its diabetes drug Victoza, that
some patients taking the drug have had severe inflammation of the pancreas,
daily Beringske Tidende reported. 
    
    SANOFI 
    The drugmaker said a late-stage Phase III study carried out on its
myelofibrosis treatment showed positive results. 
    
    WM MORRISONS 
    Britains' No. 4 supermarket Wm Morrisons said on Friday it has agreed a long
term deal with online grocer Ocado OCDO.L to enable Morrisons.com to start
grocery deliveries to customers by January 2014.
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