Forexpros – European shares bounced from a three month low Tuesday, as better than expected earnings combined with U.S. new home sales to foster the risk on atmosphere.
At the close of European trade, the EURO STOXX 50 added 1.75%, France’s CAC 40 advanced 2.29%, while Germany’s DAX climbed 1.03%. Meanwhile, in the U.K. the FTSE 100 gained 0.78%.
Sparking the risk on euro trade, data indicated that U.S. new home sales fell less-than-expected in March, while the previous month’s figure was revised higher.
The U.S. Census Bureau said new home sales fell by 7.1% to a seasonally adjusted 328,000 units in March, compared to expectations for a decline to 320,000.
New home sales for February were revised up to 353,000 units from a previously reported 313,000 units.
The data came on the heels of an industry report showing that U.S. home prices fell to the lowest level since 2002 in February.
Standard & Poor’s Case-Shiller house price index gave back an annualized rate of 3.5% in February from a year earlier, compared to expectations for a 3.4% decline.
Month-on-month, U.S. home prices dipped 0.8% in February, worse than expectations for a modest 0.2% decline.
Another report showed that U.S. consumer confidence fell unexpectedly in April, moving further off February’s 12-month high.
The Conference Board, a market research group said its index of consumer confidence ticked down to 69.2 from a downwardly revised reading of 69.5 in March. Analysts had expected the index to ease up to 69.7 in April.
The euro remained supported after an auction of Dutch government debt earlier in the day met with solid investor demand, but fears that the country could lose its triple-A credit rating lingered following the collapse of the government on Monday.
Sentiment on the shared currency also remained fragile after an auction of Spanish bills saw the country’s short-term borrowing costs almost double.
The auction came one day after the Bank of Spain confirmed that country’s economy entered a recession in the first quarter, with gross domestic product contracting by 0.4% in the three months to March, following a contraction of 0.3% in the fourth quarter.
Meanwhile, Italy auctioned EUR3.34 billion of government bonds at the highest costs since January.
Blood plasma product company, Grifols, rocketed 12% after beating analysts first quarter net income estimates
Nordea, the Nordic’s biggest lender, added 3.8% after beating estimates.
Michelin & Cie advanced 6.1% on improved revenue
U.S. stocks are trading mixed mid session with the Dow ahead by 0.75%, the S&P 500 gaining 0.51% and the Nasdaq easing lower by 0.11%.
Investors are awaiting Ben Bernanke’s speech and the Fed’s interest rate decision, as well as the FOMC statement and durable goods on Wednesday. Meanwhile, in the euro zone, ECB President Draghi will be speaking and New Zealand will also announce its interest rate decision.
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