By Carla Mozee, MarketWatch
Euro dips below $1.14
European stocks finished solidly higher Thursday, with German
stocks surging at the close as the head of the European Central
Bank reiterated commitment to the bank's massive stimulus program
for the eurozone.
The Stoxx Europe 600 rose 0.6% to 397.99, with all sectors
finishing higher. Major stock indexes for much of the session had
vacillated in and out of the red, with volume lower overall as some
European bourses were closed for the Ascension Day holiday
(http://www.marketwatch.com/story/which-markets-are-closed-for-ascension-day-2015-05-14).
But stocks firmed in afternoon trade after an unexpected decline
in U.S. jobless claims
(http://www.marketwatch.com/story/jobless-claims-cling-near-15-year-low-2015-05-14)
blunted the euro's advance against the U.S. dollar. Then ahead of
the close, ECB President Mario Draghi, in a speech in Washington,
said he and his colleagues will continue providing monetary support
to the eurozone economy as long as it's needed.
Germany's DAX 30 shot up as much as 2% before closing 1.8%
higher, at 11,559.82. The index tracking stocks in Europe's largest
and export-oriented economy had earlier in the day fallen by as
much as 1.2%, in part as the euro (EURUSD) rose above $1.14 for the
first time since late February.
Businesses and households have been "very hesitant" to take on
risk after nearly seven years of "a debilitating sequence of
crises," Draghi said.
"For this reason, quite some time is needed before we can
declare success, and our monetary policy stimulus will stay in
place as long as needed for its objective to be fully achieved on a
truly sustained basis," he said.
The ECB in March launched a massive EUR1.1 trillion bond-buying
program aimed at beating deflation risks and encouraging economic
growth.
In Paris, the CAC 40 rose 1.4% to 5,029.31, and in London, the
FTSE 100 rose 0.3% to 6,973.04.
The euro (EURUSD) was pushed back to $1.1369 as Draghi spoke,
and after the U.S. jobless claims data came in better than
expected. Economists polled by MarketWatch had expected claims to
rise to a seasonally adjusted 275,000.
"Because jobless claims are staying pretty consistent and they
are strong, optimism for dollar bulls will continue that the
Federal Reserve can raise interest rates," said Jameel Ahmad, chief
market analyst at FXTM.
On Wednesday, the dollar (DXY) was punished after
weaker-than-expected U.S. economic data underscored expectations
the Federal Reserve will wait until later in the year to make its
first interest-rate hike since 2006.
Equities "aren't so much at risk for interest-rate hikes because
the pace of rate hikes by the Federal Reserve is going to be
extremely slow," said Ahmad. "As the European Central Bank, the
People's Bank of China and the Reserve Bank of Australia have eased
monetary policy, there is still cheap money for investors."
Read: Fed's rate-hike path, not timing, is what matters, says
Schwab strategist
(http://www.marketwatch.com/story/schwab-strategist-says-hike-path-not-timing-is-what-to-focus-on-2015-05-13)
In Athens, the Athex Composite finished up 0.6% at 833.42.Greek
bond prices were mixed, with the yield on two-year debt down 26
basis points at 19.47% as prices rose. The yield on 10-year debt
rose 4 basis points to 10.37%.
Greek Finance Minister Yanis Varoufakis on Thursday said
Greece's debt repayments to the European Central Bank should be
pushed back to "the distant future,"
(http://www.marketwatch.com/story/greek-finance-minister-calls-for-ecb-repayment-delay-2015-05-14)
Reuters reported. Athens on Tuesday made a 750-million-euro ($836.7
million) loan repayment to the International Monetary Fund, but did
so by raiding an emergency account.
Among movers, Telefonica SA fell 1%, as analysts pointed to a
lackluster performance in the company's domestic operations.
Quarterly profit overall rose to 1.8 billion euros
(http://www.wsj.com/articles/telefonica-boosted-by-gain-after-o2-sale-1431584569).
But TalkTalk Telecom Group PLC's shares were among the Stoxx
600's strongest performers, up 5.7% as the firm raised its
revenue-growth target
(http://www.marketwatch.com/story/talktalk-ups-revenue-growth-target-as-profit-rises-2015-05-14).
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