European Factors to Watch-Shares seen edging lower, focus on data
LONDON, Aug 15 (Reuters) - European shares were expected to fall slightly from their 2-1/2-month highs on Thursday, tracking losses on Wall Street and in Asia, on persistent concerns the U.S. Federal Reserve might start cutting its stimulus from next month. St. Louis Federal Reserve President James Bullard said late on Wednesday the Fed risked pushing inflation even lower if it tapered bond purchases too aggressively. Selling on Wall Street accelerated after his comments as some investors speculated a decision to trim stimulus could be taken within weeks. A Reuters poll also showed on Wednesday a majority of economists expect the Fed to reduce bond purchases at its Sept. 17-18 policy meeting. At 0622 GMT, futures for Euro STOXX 50, Britain's FTSE 100 , Germany's DAX and France's CAC were 0.1 to 0.3 percent lower. Japan's Nikkei fell 2.1 percent on Thursday, while U.S. shares dropped 0.4 to 0.7 percent in the previous session, when the FTSEurofirst 300 index managed to end 0.3 percent higher on data showing the euro zone had emerged from recession. Investors will keep a close eye on more economic data and earnings for hints about the market's near-term direction. On Thursday, Holcim, the world's largest cement maker, reported flat second-quarter profit, while Zurich Insurance's net profit fell nearly 30 percent. According to Thomson Reuters StarMine, 86 percent of the STOXX Europe 600 companies have announced second-quarter results so far, of which 56 percent have met or beaten forecasts. However, Europe lags the United States, where 72 percent of the S&P 500 companies have met or beaten predictions. More than 90 percent of the U.S. firms have reported results. "Equities have survived another earnings season intact. Since Alcoa announced results six weeks ago, the STOXX 600 has risen 5.1 percent and the S&P 500 by 3.3 percent. We suspect the focus on micro issues will now turn into a focus on macro issues," Graham Bishop, senior equity strategist at Exane BNP Paribas, said. He said investors' attention will turn to green shoots and structural reform in the euro zone, further traction in the UK and the U.S. and economic stabilisation in China. The market's focus at 1230 GMT will be on the first-time claims for U.S. jobless benefits for the week ended Aug. 10, with economists expecting a total of 335,000 new filings, against 333,000 in the prior week. In the UK, July's retail sales numbers, due at 0830 GMT, are expected to rise to 0.6 percent from 0.2 percent in the previous month. "UK GDP has already shown signs of improvement since the start of the year and another increase in retail sales would be a sign that activity is gaining momentum," Annalisa Piazza, analyst at Newedge Strategy, said in a note. In the bonds market, German Bund futures opened flat at 140.95, keeping close to seven-week lows of 140.56 hit on Wednesday after data showed the euro zone economy recovered from a lengthy recession in the second quarter. -------------------------------------------------------------------------------- MARKET SNAPSHOT AT 0627 GMT: S&P 500 1,685.39 -0.52 % -8.77 NIKKEI 13,752.94 -2.12 % -297.22 MSCI ASIA EX-JP 524.37 -0.17 % -0.91 EUR/USD 1.3286 0.23 % 0.0031 USD/JPY 97.75 -0.39 % -0.3800 10-YR US TSY YLD 2.705 -- -0.01 10-YR BUND YLD 1.810 -- 0.00 SPOT GOLD $1,339.96 0.4 % $5.37 US CRUDE $107.14 0.27 % 0.29 > Dollar, stocks slip on Fed stimulus uncertainty > Wall St falls on uncertainty about Fed's bond buying > Nikkei falls on weak Wall St; profit-taking on brokers, realtors > U.S. bond yields hover near two-year highs > Dollar falls vs yen as Japan ministers dampen tax cut talks > Gold adds to gains as U.S. data, SPDR inflows lift sentiment > Copper stays near 9-week high on global recovery hopes > Brent prices climb towards $111 as Egypt unrest stokes supply fears COMPANY NEWS HOLCIM The world's largest cement maker reported flat second-quarter profit as higher prices and cost cuts helped offset declining sales volumes. particularly in India. ZURICH INSURANCE GROUP The insurer said net profit fell by 27 percent in the second quarter, more than expected, and sounded a cautious outlook about reaching its targets. RIO TINTO The global miner said on Wednesday it would have to cut up to 1,700 jobs in its Mongolian operation, after a more than $5 billion underground expansion of the giant Oyu Tolgoi copper mine was suspended. IAG The parent of British Airways and Iberia said on Wednesday it placed firm orders and options for up to 220 Airbus A320 short-haul aircraft, with as many as 120 of the planes for its Barcelona-based subsidiary, Vueling. DEUTSCHE EUROSHOP The company late on Wednesday said it was sticking with its 2013 outlook after posting a 15 percent gain in first-half earnings before interest and tax to 77.2 million euros ($102 million). Related news HENNES & MAURITZ Swedish budget fashion retailer Hennes & Mauritz said on Thursday its sales in stores open at least a year were down 1 percent in local currencies in July, undershooting expectations. AIR BERLIN Germany's second largest airline said its targets were becoming more difficult to reach and that its shareholder equity declined further in the second quarter.
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