LONDON— The rebound in stock markets over the past couple of days ground to a halt Thursday following a mixed batch of corporate earnings and further evidence of a sharp slowdown in the economy of the 17 countries that use the euro.
Over the past couple of days, markets have been buoyed by solid U.S. earnings, notably from Apple Inc., and an indication from Federal Reserve chief Ben Bernanke that the central bank was prepared to do more, if needed, to shore up the U.S. economy.
However, fairly downbeat updates from the likes of Banco Santander, Europe’s biggest bank by market capitalization, Deutsche Bank AG and AstraZeneca PLC deflated the mood in Europe. A mixed bag of earnings out of the U.S. from PepsiCo., ExxonMobil and United Continental and a smaller-than-anticipated fall in weekly U.S. jobless claims failed to change the general tone at the open on Wall Street.
A survey from the European Commission showing economic sentiment in the eurozone down more than expected in April added to the gloom. Its main indicator fell from 94.5 to 92.8— the consensus in the markets was for a far more modest decline to 94.
“April’s survey confirmed the downbeat picture painted by other recent indicators and dashed any lingering hopes that the eurozone economy may escape a double-dip recession,” said Ben May, European economist at Capital Economics. In recent weeks, there has been an increasing backlash against the austerity drive in many European countries amid worries that governments will be unable to deliver their debt-reduction plans as their economies tank.
“With political divisions opening up across Europe, pressure is building on Germany and the European Central Bank to do more and rein back on the current austerity based approach,” said Michael Hewson, markets analyst at CMC Markets. Given that uncertain backdrop, shares in Europe have given up a chunk of their gains earlier in the week.
Those concerns weighed heavy on Europe’s main markets as well as the euro, which was trading 0.1 percent lower at $1.3209.
Oil markets were fairly tepid, with benchmark oil for June delivery up 10 cent at $104.22 per barrel in electronic trading on the New York Mercantile Exchange. — AP