European markets end higher as Wall Street pauses ahead of key earnings

European markets end higher as Wall Street pauses

LONDON — European stock markets closed modestly higher Thursday as Wall Street paused for breath following three straight days of gains as investors awaited earnings from key companies including Google Inc. after the closing bell.

In Europe, the FTSE 100 index of leading British shares closed up 15.38 points, or 0.4 percent, at 4,361.84 while Germany’s DAX rose 28.75 points, or 0.6 percent, to 4,957.19. The CAC-40 in France was 28.41 points, or 0.9 percent, higher at 3,199.68.

And on Wall Street, the Dow Jones industrial average was down 7.48 points, or 0.1 percent, at 8,608.73 around midday New York time while the broader Standard & Poor’s 500 index fell 3.49 points, or 0.4 percent, to 929.19.

The modest retreat in the U.S. came despite better than expected U.S. jobless claims data and forecast-busting earnings from JPMorgan Chase & Co.

Market sentiment has been buoyant all week — Japan’s main index has managed to post three straight days of gains after nine consecutive retreats — on hopes that the U.S. second-quarter reporting season would turn out better than expected.

So far, elevated expectations have been largely met, not least from investment bank Goldman Sachs Group Inc.

Rival JP Morgan turned in a strong performance too during the second quarter. It reported earnings of 28 cents a share, largely because of strong revenues in the investment banking division, and way ahead of expectations of 4 cents a share. However, much of the shine from the earnings came off with the company’s warning that credit-related losses would remain “for the foreseeable future.” The company’s share price was down over 1 percent despite the solid earnings update.

On Friday, investors will get updates from Citigroup Inc. and Bank of America Corp. — two banks have widely thought to have suffered worse than Goldman Sachs and JP Morgan during the financial crisis, so nervousness reigns.

The problems facing commercial lender CIT Group Inc. highlighted that it’s not all plain sailing in the U.S. financial sector. Wednesday’s news from CIT that it wasn’t able to get emergency government assistance raised expectations that it could file for bankruptcy protection and reminded investors that any recovery will not be straightforward.

Away from the banks, investors will be interested in earnings from Google and IBM Corp., when they unveil their results after the U.S. markets close.

Elsewhere, weekly U.S. jobless claims data from the Labor Department did little to encourage further buying even though they fed into the prevailing view of an imminent U.S. economic recovery. New applications for unemployment insurance plunged by a seasonally adjusted 47,000 to 522,000, the lowest level since early January. Economists expected claims to rise to around 575,000.

Not all the news around the world has been positive. Nokia Corp., the world’s biggest phone maker, saw its share price slump over 10 percent after it scrapped its goal of gaining market share this year, given tough competition from the likes of Apple Inc.’s iPhone. It also reported a 66 percent fall in second-quarter earnings.

With the global earnings picture still taking shape, analysts said the stock rally could easily falter especially as trading volumes remain low.

Earlier in Asia, Japan’s Nikkei 225 stock average gained 74.91 points, or 0.8 percent, to 9344.16 and Hong Kong’s Hang Seng closed up 103.21, or 0.6 percent, at 18,361.87.

South Korea’s Kospi added 0.8 percent to 1,432.22. Australia’s index advanced 1.8 percent, and Singapore’s stock measure was 0.5 percent higher.

In mainland China, the Shanghai benchmark was unable to hold its advance, losing 0.2 percent to 3,183.74 despite news that the economy grew by 7.9 percent in the second quarter amid rising consumer spending and industrial output after massive government stimulus measures.

Analysts said the quicker expansion, above most market forecasts, put the world’s third-largest economy within reach of the government’s 8 percent full-year growth target and offered yet more assurances for global investors who have already driven Shanghai’s stock market up nearly 75 percent this year.

Oil prices gave up some early gains, with benchmark crude for August delivery down 8 cents at $61.46 a barrel. The contract surged $2.02 overnight, taking its cue from Wall Street’s rally.

The dollar weakened 0.8 percent to 93.52 yen, while the euro rose 0.1 percent to $1.4124.

In recent weeks the dollar’s fortunes, particularly against the euro, have fluctuated inversely with stocks. When risk appetite has been elevated, stocks have rallied and the dollar has dropped. When stocks have hardly budged, the euro’s dollar rate has held steady.

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AP Business Writer Jeremiah Marquez in Hong Kong contributed to this report.