Europe’s stock markets gained momentum today despite a mixed bag of news from the U.K. and the Continent.
The DAX soared 3.4 percent in Frankfurt, as the FTSE MIB rose 2.7 percent in Milan, the CAC 40 climbed 1.9 percent in Paris and the FTSE 100 increased 1 percent in London.
In the U.S. markets gained ground despite a weaker-than-expected report on August sales, which were flat versus July. The S&P Retail Index increased 1.7 percent, or 8.49 points, to 516.52, as the Dow Jones Industrial Average rose 1.3, or 140.88 points, to 11,246.73 as trading came to a close.
Britain’s Office for National Statistics said the number of unemployed people in the U.K. rose by 80,000 to 2.51 million for the May-to-July period — the largest increase in nearly two years. But investors were more interested in the broader issue of the European debt crisis. Major French banks absorbed debt downgrades from Moody’s Investors Service, which handed Credit Agricole and Societé Generale ratings of “Aa2” and “Aa3,” respectively. The rating agency said BNP Paribas could be downgraded in the future.
Still, Moody’s said the banks — which are heavily exposed to Greek debt — had enough capital to carry them through any potential default by the troubled country.
European Commission president Jose Manuel Barroso tried to offer a partial solution to Europe’s debt woes, asking countries to issue joint bonds, or Eurobonds, which will allow them to borrow as a group and spread their debt risks.
And German Chancellor Angela Merkel and French president Nicholas Sarkozy were set to hold talks today with Greek Prime Minister George Panandreou about ongoing fears of a Greek debt default. Luxury and retail stocks were on the upswing, with Benetton, Hugo Boss, and Burberry all notching up gains of more than 5 percent. Richemont soared 6.3 percent, while PPR climbed 4.6 percent.
In the U.S., J.C. Penney Co. Inc., Kohl’s Corp., Gap Inc. and Guess Inc. all notched gains of better than 2 percent
Shares of Coldwater Creek Inc. shot up 20.4 percent, or 29 cents, to $1.71, continuing that company’s rally in heavy trading. The stock is up 84 percent over the past week. The company registered losses of nearly $28 million in the second-quarter, but chairman and chief executive officer Dennis Pence bought up 1.2 million shares of the company this month, piquing the interest of investors.