European Stocks Close Higher On Encouraging Signs in Credit
European stocks closed in the positive territory Thursday, helped by encouraging signs in credit markets.
U.S. stocks traded higher, pulled up by the jobless report but also by Dow components General Motors and McDonalds and shrugging off uncertainty regarding a rate-setting Federal Reserve meeting next week.
The London FTSE-100 ,Paris CAC-40 and the Frankfurt DAX were all higher, as was the FTSE CNBC Global 300 .
About $113 billion in commercial paper falling due next week is being refinanced without problems so far but at higher costs and shorter maturities, with confidence in short supply.
The Bank of England followed in the footsteps of the European Central Bank and indirectly provided more liquidity to commercial banks, raising the limit of fluctuation for their reserves target at the central bank to 37.5% on either side instead of the normal 1% band.
This despite criticism by Bank of England Governor Mervyn King on Wednesday that "the seed of a future financial crisis" had been planted by the European Central Bank and Fed's actions to pump liquidity in the markets during the turmoil.
And the ECB highlighted uncertainties in the financial markets which made it impossible to say whether it would resume its tightening cycle.
Looking to individual stocks, Alcatel-Lucent sank 8.7% as the company cut its full-year revenue forecast, citing a slow down in wireless spending by its North America customers.
"They announced a very good restructuring plan, but this plan was not implemented in France until September," Andre Chassagnol, analyst at HSP, told "European Closing Bell."
He said that while Alcatel's revenue was not growing, the company failed to cut costs, and warned that the restructuring plan must be implemented swiftly, "if not, Alcatel could go bankrupt."
Nasdaq's stake in the London Stock Exchange was back in the spotlight as Singapore state investor Temasek shelved its plans to buy the 31% holding, the Daily Telegraph reported Thursday. Shares of the LSE closed nearly flat.
And U.K. bank Barclaysraised 2.4 billion euros ($3.3 billion) for its third European private-equity fund, its shares closing over 1% higher.
Economists think trading will be volatile on Friday and early next week before the closely-watched Fed meeting on Tuesday.