- US GDP contracts
- US weekly jobless claims fall
- Eurozone still fragile, says Linde
- Russia, Kazakhstan and Belarus sign treaty
FTSE 100: 0.29%
CAC 40: -0.02%
FTSE MIB: -0.35%
IBEX 35: -0.21%
Stoxx 600: 0.06%
European stocks were little changed after US data showed the world's biggest economy shrank more than expected.
US gross domestic product (GDP) shrank by an annualised rate of 1% in the first quarter of 2014, according to revised estimates by the Department of Commerce today, representing the first quarterly contraction in three years.
Analysts had expected the initial estimate of 0.1% growth to be revised lower to -0.5% following a 2.6% GDP expansion in the fourth quarter of 2013.
However, Capital Economics said it believed there was "nothing to worry about".
"For a start, the downward revision is almost entirely because inventories were a much bigger drag on growth than previously thought," the economist said.
"[...] But that bigger first-quarter drag means that we are likely to see a bigger bounce back in the second quarter."
Separately, initial weekly unemployment claims fell by 27,000 to reach 300,000 during the week ended May 24th, according to the US Department of Labor. The consensus estimate had been for a reading of 318,000.
Another report showed US pending home sales fell 9.4% year-on-year in April following a 7.5% drop a month earlier. Economists had pencilled in an 8.7% decline.
ECB's Linde says Eurozone still fragile
Bank of Spain Governor Luis Linde has warned that the Eurozone economy continues to be "fragile" and that "important efforts" are still needed, albeit the "gentle recovery" started in 2013.
The European Central Bank (ECB) member pointed out that the recent weak reading in the region's GDP for the first three months of the year "illustrates the still fragile and uneven character of this economic improvement in the euro-area".
The ECB is scheduled to announce its next monetary policy decisions on June 5th. President Mario Draghi has said the ECB is ready to act if necessary to boost the stagnant recovery.
In other European news, Spain's first quarter GDP growth was confirmed at 0.4% quarter-on-quarter, but revised down to 0.5% year-on-year from the original reading of 0.6%.
Italy sold €7.5bn of bonds maturing in five and 10 years. The Rome-based Treasury allotted €3bn of debt due in September 2024 at an average yield of 3.01%, the lowest for similar-maturity securities since Bloomberg started compiling the data in 1991.
The average yield to maturity on bonds from Greece, Ireland, Italy, Portugal and Spain fell to 2.13% yesterday, matching the least since the formation of the currency bloc in 1999, according to Bank of America Merrill Lynch indexes.
Meanwhile, Russia, Kazakhstan and Belarus signed a treaty today creating a vast trading bloc which they hope will challenge the economies of the European Union (EU), the US and China. The move comes amid EU and US sanctions placed on Russia over the turmoil in Ukraine.
Kingfisher slides after Q1 results
Kingfisher slumped after reporting first quarter profit that fell short of analysts' expectations.
Man Group gained after confirming it is in talks to buy US money manager Numeric Holdings.
Electricite de France declined after Exane BNP Paribas downgraded the French utility to 'neutral' from 'outperform'.
Tate & Lyle retreated after posting full-year profit that missed the consensus estimate.
UbiSoft Entertainment advanced after saying its Watch Dogs game broke the company's record for first-day sales.
Aggreko dropped after appointing Centrica's Chris Weston as Chief Executive Officer.
The euro rose 0.21% to $1.3619.
Brent crude futures increased $0.444 to $110.300 per barrel, according to the ICE.