EUROPE MARKETS: European Stocks Slump As Yellen's Rate Hike Message Sinks In
August 29 2016 - 8:39AM
Dow Jones News
By Sara Sjolin, MarketWatch
Alstom climbs after contract win
European stocks traded in negative territory as rising
expectations the U.S. Federal Reserve will raise interest rates
later this year poked the air out of the recent rally.
The Stoxx Europe 600 index lost 0.3% to 342.66, pulling back
after a 1.1% climb last week.
The pan-European benchmark settled 0.5% higher on Friday
(http://www.marketwatch.com/story/european-stocks-edge-down-before-yellen-steps-onto-center-stage-2016-08-26),
as Fed Chairwoman Janet Yellen at a closely watched speech at
Jackson Hole, Wyo., said the U.S. economy is improving, seen as a
sign of confidence in economic growth world-wide. The central-bank
boss also hinted a rate increase is on the cards in coming months,
which weighed on U.S. markets on Friday and dragged stocks in most
of Asia and Europe lower on Monday.
Read:Here's what the Fed's rate should be, using rule footnoted
in Yellen speech
(http://www.marketwatch.com/story/heres-what-the-feds-rate-should-be-using-rule-footnoted-in-yellen-speech-2016-08-26)
"The Fed is about to tighten the screw again on cheap money and
one step closer to bringing the monetary policy to its normal path.
This is not the kind of news that the equity traders are going to
cheer and hence we are seeing this kind of reaction in the market,"
said Naeem Aslam, chief market analyst at ThinkMarkets, in a
note.
"The most important data which is standing between the Fed and
another rate hike is the upcoming U.S. [nonfarm payrolls] number
due this week on Friday," he added.
The nonfarm-payrolls data is one of the most highly anticipated
monthly economic reports, as it reveals the health of the U.S.
labor market and helps the Fed set its path for monetary
policy.
The dollar strengthened against most major currencies after the
Yellen's speech and continued its march higher on Monday. The euro
slipped to $1.1183, down from $1.1197 late Friday in New York.
Movers: Shares of Alstom SA (ALO.FR) gained 2.8% after the
French infrastructure company late Friday said it signed a EUR1.8
billion deal to design and build 28 new high-speed trains for U.S.
rail operator Amtrak.
Roche Holding AG (ROG.EB) rose 0.5% after the Swiss drugmaker
said it had received an "emergency use authorization"
(http://www.marketwatch.com/story/fda-grants-roche-zika-test-emergency-authorization-2016-08-29)
from the U.S. Food and Drug Administration for its Zika test.
Indexes: Germany's DAX 30 index slid 0.6% to 10,522.30, while
France's CAC 40 index gave up 0.8% to 4,407.04.
Meanwhile, U.K. markets were closed for a local bank
holiday.
(END) Dow Jones Newswires
August 29, 2016 09:24 ET (13:24 GMT)
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