By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- European stock markets struggled for
direction on Wednesday, as investors stayed cautious ahead of the
U.S. second-quarter GDP report and the latest policy decision from
the Federal Reserve. Disappointing German retail-sales data further
weighed on sentiment.
The Stoxx Europe 600 index was slightly higher at 299.55.
Shares of Eutelsat Communications slumped 4.6% after the
satellite provider said it will buy 100% of Satelites Mexicanos SA
for $831 million.
Shares of ThyssenKrupp AG dropped 3.8% after UBS cut the German
financial conglomerate to sell from buy, citing an increasing risk
that it will need to raise new capital.
Drinks maker Diageo PLC added 1.6% after reporting a rise in
full-year profit and revenue, although it warned of some weakness
in emerging markets and continued trouble in western Europe.
The broader European stock markets also digested mixed data from
the region. In Germany, data showed retail sales unexpectedly
slumped in June. Sales dropped 1.5% on the month, fully erasing
gains made in April and May and marking the sharpest monthly drop
since December 2012.
Meanwhile, the unemployment rate for the European Union fell for
the first time in over two years in June, down to 10.9% from 11% in
May. Unemployment in the euro zone edged down to 19.27 million from
19.29 million, the first decline since April 2011, although not
enough to move the overall jobless rate from 12.1%.
The DAX 30 index traded 0.1% higher at 8,275.82.
Among other country-specific indexes, France's CAC 40 index was
up 0.1% at 3,988.44 and the U.K.'s FTSE 100 index dropped 0.6% to
6,612.27.
U.S. stock futures pointed to a flat open on Wall Street, ahead
of an eventful day stateside. At 1:30 p.m., or 8:30 a.m. Eastern
Time, second-quarter economic-growth data will be released with
analysts expecting the gross domestic product to rise 1%, a decline
from the 1.8% printed in the first quarter.
At 8:15 a.m. Eastern, ADP private-sector payrolls data are due,
widely seen as a potential precursor to Friday's bigger
nonfarm-payroll jobs report.
Later in the day, and after the European market close, the
Federal Open Market Committee announces its latest policy decision,
with investors expected to hang on every word change in the
statement to see whether the central bank adds more clarity on the
timing of tapering asset purchases.
Back in Europe, oil firms were among notable movers, as oil
prices rose. Shares of BP PLC (BP) added 0.5% and Royal Dutch Shell
PLC (RDSB) rose 0.9%.
Also on the rise, shares of GKN PLC gained 2.7%, after J.P.
Morgan Cazenove lifted the engineering group to overweight from
neutral. The analysts noted the company's first-half results came
in ahead of expectations and cited this as the reason for the
upgrade.
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