European shares dip

European shares slipped yesterday following some poor US economic data but still ended the month in positive territory for the longest monthly winning streak since 1997.

April was the 11th straight monthly gain for the broad STOXX Europe 600 index. It ended the day down 0.2 per cent at 296.72 points, edging off a four-and-a-half-year high hit during the day.

The FTSEurofirst 300 index of pan-European shares fell 0.2 per cent to 1,200.60 points.

Data showed business activity in the US Midwest unexpectedly shrank to its lowest level since September 2009, denting investor sentiment because of its implications for global economic growth.

“It was another pretty bad set of data and it just feels the market is just struggling on volumes and impetus,” Andy Ash, head of sales at Monument Securities, said. “People are considering how strong the market has been.”

He suggested that if the market started to pull back from its recent gains, losses could be more than five per cent. Banking stocks helped curb losses on equity indexes after UBS and Deutsche Bank reported better first-quarter results than anticipated.

Their shares rose 5.7 per cent and 6.1 per cent in volume roughly four times their 90-day average.

BP gained 2.1 per cent after an impressive performance in the oil major’s trading division lifted profits.

US stocks were largely flat yesterday as investors found little reason to extend a recent rally that put the S&P 500 within a point of an all-time intraday high, though technology shares lifted the Nasdaq.

Markets fluctuated between slight gains and losses, with the S&P on track for its six straight month of gains. Encouraging data on home prices and consumer confidence added to the positive tone. However, a decline in regional business activity underlined growth concerns that remain.

The Dow Jones industrial average was down 4.38 points, or 0.03 per cent, at 14,814.37. The Standard & Poor’s 500 Index was up 0.62 points, or 0.04 per cent, at 1,594.23. The Nasdaq Composite Index was up 14.79 points, or 0.45 per cent, at 3,321.81. Equities continue to draw support from expectations that central banks will maintain low interest rates and other economic stimulus measures. A statement from the Federal Reserve due Wednesday is expected to keep in place the central bank’s pace of bond buying to stimulate the economy.

The European Central Bank will meet tomorrow. A Reuters poll of economists showed policymakers are expected to cut interest rates.

The S&P 500 ended at an all-time high on Monday as growth-oriented stocks, including energy and technology shares, drove the index’s sixth rise in the past seven sessions.

A positive finish to April would deliver a sixth straight month of gains. That would be the longest winning streak since September 2009, when the S&P 500 rallied for seven straight months. The broad market index is up 1.6 per cent for the month, and up about 12 per cent so far in 2013.

The size and speed of the market’s gains so far this year have some analysts suggesting a correction could be in the works.