By Sara Sjolin, MarketWatch
LONDON (MarketWatch) -- Europe's benchmark stock index closed at
a fresh two-month high on Friday, helped higher by the region's
insurance firms, while major national stock markets wobbled on a
mixed bag of U.S. labor data.
The Stoxx Europe 600 index rose 0.3% to close at 304.15, sending
it 1.8% higher on the week and marking a five-day winning
streak.
The index briefly slipped into negative territory in the
afternoon after the U.S. Labor Department said nonfarm payrolls
rose by 162,000 in July, falling short of expectations of a 180,000
print. Some analysts had in recent days raised their estimates
after the ADP jobs earlier in the week showed private-sector
employers added 200,000 jobs in July. A better-than-expected U.S.
jobless-claims report on Thursday along with strong ISM
manufacturing numbers further added to hopes of a higher nonfarm
reading from the world's largest economy.
Meanwhile, the U.S. unemployment rate fell to 7.4%, the lowest
level since December 2008, partly because more people dropped out
of the workforce.
Investors have lately watched data out for U.S. data to gauge if
they strengthen or weaken the case for the U.S. Federal Reserve to
taper its $85-billion-a-month asset purchases. Fed boss Ben
Bernanke has on several occasions said a reduction in bond buys is
dependent on an improvement in economic data, and Friday's labor
report did little to help sketch out a timeline, analysts said.
"We have long believed that the Fed's tapering decision hinges
on nonfarm-payroll growth remaining in the 175,000-200,000 range
through the end of the summer. While today's report missed the
range by a narrow margin, the 3- and 6- month averages are still
well within it at 175,000 199,000 respectively," said Aneta
Markowska, senior U.S. economist at Société Générale, in a
note.
"There is one more employment report between now and the
September FOMC meeting. And, if the latest drop in initial jobless
claims is any indication, it should be a solid one. Therefore,
while we acknowledge that today's data was disappointing, we
maintain our call that the Fed will begin to scale back asset
purchases at the upcoming September meeting," she added.
U.S. stocks traded lower on Wall Street, after both the S&P
500 index (SPX) and the Dow Jones Industrial Average (DJI) closed
at all-time highs on Thursday.
Movers
Among notable movers in Europe, insurance firms posted some of
the biggest gains after a round of well-received earnings
reports.
Shares of AXA SA added 2.2% after reporting a 14% rise in
first-half operating profit.
Allianz SE rose 0.8% after the German firm said net profit
climbed 27% in the second quarter.
Zurich Insurance Group AG picked up 1.5%, Swiss Re AG gained
1.4% and Legal & General Group PLC added 0.5%.
Also on the rise, shares of Man Group PLC surged 9.5% after the
investment firm said it swung to a pretax profit for the first half
of 2013 from a loss in the same period last year.
Novartis AG rose 1.4% after the U.S. Food and Drug
Administration extended the age approval range for the drug maker's
meningococcal vaccine in the U.S. for infants down to two
years.
International Consolidated Airlines Group PLC added 6.7% after
the British Airways parent posted a better-than-expected
second-quarter operating profit of 245 million euros ($324
million).
On a more downbeat note, shares of Royal Bank of Scotland Group
PLC (RBS) dropped 3.3% after the firm named Ross McEwan as new
chief executive. RBS also reported a first-half net profit of 535
million pounds ($809 million), after a loss of GBP2.03 billion last
year.
Among country-specific indexes in Europe, Germany's DAX 30 index
fell 0.1% to 8,406.94, trimming the weekly gain to 2%.
The U.K.'s FTSE 100 index lost 0.5% to 6,647.87, although still
closing out the week 1.4% higher.
France's CAC 40 index rose 0.1% to 4,045.65, sending it 1.9%
higher on the week.
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