European Markets Pared Gains After Yellen Comments

(RTTNews) - The European markets ended Wednesday's session with mixed results. The majority of the markets had been up solidly in early trade, after European Central Bank President Mario Draghi reiterated the dovish comments he made in October at a cultural event in Frankfurt.

However, the markets pared their gains in the afternoon following comments from Janet Yellen. The Federal Reserve will raise interest rates gradually once it begins to tighten monetary policy, Federal Reserve Chair Janet Yellen assured lawmakers Wednesday morning.

"We have a recovering economy....households are in better shape," she told a House Financial Services panel.

"If the incoming information supports that expectation, then or statement indicates that December would be a live possibility," she said.

"Now no decision has been made on that and, what it will depend on, is the [Federal Open Market Committee's] assessment at the time. That assessment will be informed by all of the data that we collect between now and (the December meeting)."

The National Institute of Economic and Social Research lowered its U.K. growth projections and expects the Bank of England to raise interest rates at the start of next year.

The think tank downgraded growth forecast for this year to 2.4 percent from 2.5 percent and that for next year to 2.3 percent from 2.4 percent. For 2017, it estimated 2.6 percent expansion.

The institute said the BoE is likely to lift interest rates at the start of 2016 and then gradually by 50 basis points a year, reaching 2 percent by the end of 2018.

The Euro Stoxx 50 index of eurozone bluechip stocks decreased 0.10 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, added 0.61 percent.

The DAX of Germany dropped 0.95 percent, but the CAC 40 of France rose 0.25 percent. The FTSE of the U.K. gained 0.43 percent, but the SMI of Switzerland finished higher by 0.18 percent.

In Frankfurt, Volkswagen sank 9.82 percent, after it said the new emissions revelation could cost the company 2 billion euros (approximately $2.19 billion). Daimler fell 2.17 percent and BMW lost 1.30 percent.

Barry Callebaut surrendered 9.68 percent after the world's biggest maker of bulk chocolate lowered its mid-term targets.

Fresenius Medical Care dropped 2.79 percent and Fresenius weakened by 2.40 percent.

In Paris, Technip gained 4.93 percent and Total added 0.12 percent.

Peugeot declined 1.89 percent and car parts maker Valeo fell 1.41 percent.

In London, Glencore surged 5.36 percent, after the commodities trader and miner said it was on track to reduce its debt and boost liquidity. The company also reiterated guidance for its trading arm.

Marks & Spencer gained 2.79 percent after raising its profitability forecast.

Vedanta Resources dipped 0.49 percent after scrapping dividend for the first half.

Housing stocks extended yesterday's weakness, after Liberium cut its rating on the sector to "Sell." Taylor Wimpey sank 3.94 percent, Berkeley Group fell 3.25 percent and Persimmon surrendered 3.23 percent.

Eurozone producer prices in September declined at the fastest annual pace since the start of the year, preliminary data from Eurostat showed Wednesday. The producer price index for the domestic market dropped 3.1 percent year-on-year following a 2.6 percent decline in August. Economists had expected a 3.3 percent decrease.

Eurozone's private sector economy expanded slightly less than initially estimated in October, final data from Markit showed Wednesday. The final composite output index came in at 53.9 in October, marginally below the flash score of 54 but above September's 53.6.

Germany's private sector expanded marginally in October but the latest pace of growth was slower than initially estimated, final data from Markit showed Wednesday. The final composite Purchasing Managers' Index rose marginally to 54.2 from 54.1 in September. It was below the flash score of 54.5.

The French private sector grew at the fastest pace in four months in October and exceeded initial growth estimate, final data from Markit showed Wednesday. The composite Purchasing Managers' Index rose to 52.6, a four-month high, from 51.9 in September. The flash reading was 52.3.

The U.K. service sector growth strengthened for the first time in four months in October and exceeded expectations, underpinned by the rise in business activity and job creation, survey results from Markit Economics showed Wednesday.

The Chartered Institute of Procurement & Supply/Markit services Purchasing Managers' Index rose more-than-expected to 54.9 in October from 53.3 in September. It was forecast to rise to 54.5.

China's services activity grew at a pace that was the most pronounced since July suggesting that policy measures have begun to stimulate the economy, a survey from Markit revealed Wednesday. The Caixin/Markit Purchasing Managers' Index for services rose to 52 in October from a 14-month low of 50.5 in September. Nonetheless, the reading suggests modest growth that was slower than the historical average.

Private sector employment in the U.S. increased roughly in line with economist estimates in the month of October, according to a report released by payroll processor ADP on Wednesday. The report said the private sector added 182,000 jobs in October following a downwardly revised increase of 190,000 jobs in September.

Economists had expected private sector employment to climb by about 180,000 jobs compared to the addition of 200,000 jobs originally reported for the previous month.

Reflecting an increase in exports and a decrease in imports, the Commerce Department released a report on Wednesday showing that the U.S. trade deficit narrowed more than expected in the month of September.

The report said the trade deficit narrowed to $40.8 billion in September from a revised $48.0 billion in August. The deficit was the smallest since coming in at $38.5 billion in February. Economists had expected the deficit to narrow to $41.1 billion from the $48.3 billion originally reported for the previous month.

Activity in the U.S. service sector unexpectedly grew at a faster rate in the month of October, according to a report released by the Institute for Supply Management on Wednesday. The ISM said its non-manufacturing index climbed to 59.1 in October from 56.9 in September, with a reading above 50 indicating growth in the service sector.