This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Markets Steady Despite Growing ECB Rate Cut Talk

By NATALIYA VASILYEVA

MOSCOW (AP) â¿¿ European markets steadied Tuesday following a strong performance the previous session despite growing expectations of an interest rate reduction from the European Central Bank later this week.

The expectation that the ECB will cut its main interest rate from the already all-time low of 0.75 percent has grown after figures Tuesday showed eurozone unemployment up at another record high of 12.1 percent.

But while the rise in unemployment was not much of a surprise, the sharp fall in inflation was. Eurostat, the EU's statistics office, said inflation rose 1.2 percent in the year to April, way down from the 1.7 percent rate recorded in March and markedly below market expectations for a modest decline to 1.6 percent.

The preliminary April rate was the lowest since February 2010 and takes inflation even further below the ECB's target of keeping inflation "close to but below" 2 percent.

Given that expectations of a rate cut were largely factored in and following a solid session on Monday, stocks were solid, if unspectacular.

"I think the reason for this mild response is that a rate cut has now already been priced into the markets," said Craig Erlam, market analyst at Alpari.

Germany's DAX added 0.5 percent to 7,913 while France's CAC-40 was 0.3 percent lower at 3,856. Britain's FTSE 100 was down 0.25 percent to 6,441.

The euro, which has dropped in recent days as investors priced in a rate cut, was trading 0.4 percent higher at $1.3150.

Wall Street opened slightly lower after drug company Pfizer and other companies reported weak earnings.

The earnings reports offset the impact of upbeat economic indicators. The S&P/Case-Shiller home price index rose 9.3 percent in February, the most in almost seven years. Separately the New York-based Conference Board said its consumer confidence index rose to 68.1 points in April from 61.9 in March.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 17,986.25 -84.15 -0.47%
S&P 500 2,101.58 -12.91 -0.61%
NASDAQ 4,960.1380 -56.7910 -1.13%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs