By Barbara Kollmeyer, MarketWatch
MADRID (MarketWatch) -- European stocks held near record levels
on Wednesday, with peripheral euro-zone markets such as Portugal
and Spain continuing to rise as borrowing costs fall in those
countries. Investors were waiting for the minutes of the latest
U.S. Federal Reserve meeting and weighing regional data ahead of an
upcoming European Central Bank meeting.
The Stoxx Europe 600 index was flat at 329.33, not far off from
its closing level on Tuesday of 329.40, its highest closing value
since May 19, 2008. The move was driven by upbeat German
unemployment data and falling European borrowing costs, which were
reflected in bond prices.
Among stocks on the move, shares of Akzo Nobel NV fell 3% after
the Dutch painting and chemicals company said it would continue to
cut costs in 2014 and kept its outlook for 2013.
Shares of Air France-KLM SA rose 7% after the airline reported a
rise in passenger traffic of 2.1% and a load factor rise of 0.9
points. The unit revenue per available seat-kilometer was
"resilient," the company said.
European stocks got a few pieces of data on Wednesday. Retail
sales for the euro zone rose at the fastest pace in 12 years during
November, lifting hopes for a revival in domestic demand. The sales
jump came as a surprise as the euro zone's unemployment rate stayed
stubbornly high in November, unchanged at 12.1%.
Other data showed German manufacturing orders surging in
November amid a glut of bulk orders.
The data comes ahead of a monthly meeting of the European
Central Bank on Thursday. Some had been speculating that ECB
President Mario Draghi may have to take a dovish tone, given that
the single-currency zone saw another inflation decline on Tuesday.
The Bank of England's Monetary Policy Committee will also announce
a rate decision on Thursday. Neither bank is expected to make a
change in key rates.
The rally for European stocks on Tuesday was fueled by upbeat
German employment numbers and falling borrowing costs across
Europe's periphery, which helped lift the Spain IBEX 35 index to
its best level since mid-2011 on falling bond yields.
The IBEX added another 0.5% on Wednesday, driven by a 0.8% rise
for BBVA SA as the yield on the 10-year bond fell to 3.76%,
reportedly marking fresh four-year lows. The government announced
plans to issue more debt in 2014, though that failed to rattle the
market.
Portugal's PSI 20 jumped 1.2% to 7,041.54, led by a 3% rise for
Banco Comercial Português SA as yields for Portugal's 10-year bond
also fell. A successful return to the bond market for the Irish
government has also underpinned peripheral gains and falling
yields.
Among other indexes, the German DAX 30 index was flat at
9,498.71 and the French CAC 40 index was off 0.1% to 4,257.90.
The FTSE 100 fell 0.3% to 6,733.96. Among the heavyweights,
shares of British American Tobacco PLC fell 1%.
Away from the main indexes, shares of Mothercare PLC tumbled 27%
after a profit warning. The international mother-and-baby goods
retailer said world-wide network sales fell 4.4% in the 12 weeks to
Jan. 4, and full-year profits will likely be below the current
range of market expectations.
Wall Street stocks eased as investors took in data suggesting
that the labor market improvement is picking up pace. Still to come
are minutes of the Fed meeting of Dec. 18 meeting.
More stories from MarketWatch:
Eurozone retail sales rise is fastest in 12 years
German manufacturing orders surge in November
Subscribe to WSJ: http://online.wsj.com?mod=djnwires