European stocks rebound on US growth data

European stocks rebounded Friday on figures that showed a pick up in the US growth rate, after having taken a hit on the Spanish unemployment rate breaching 25 percent for the first time, traders said. London's FTSE 100 index of top companies closed up a marginal 0.03 percent to 5,806.71 points, while Frankfurt DAX 30 gained 0.44 percent to 7,231.85 points, and in Paris the CAC 40 climbed 0.69 percent to 3,435.09 points. Madrid's IBEX 35 ended down 0.05 percent. In foreign exchange trading, the euro was flat at $1.2931 from $1.2930 late in New York on Thursday. On the London Bullion Market, gold prices climbed to $1,716 an ounce from $1,715.50 an ounce on Thursday. The US economy picked up steam in the third quarter after a tepid second quarter, growing at a better-than-expected annualised pace of 2.0 percent as consumer spending and home sales rose, the government said. US stocks failed to get much of a boost however, with Wall Street still under the shadow of earnings disappointments on Thursday from tech giants Apple and Amazon. Apple lost 1.0 percent after reporting a quarterly profit of $8.2 billion but missing expectations. Amazon stunned with a loss, mainly from a writedown of its stake in LivingSocial and higher operating costs, but the online retailer's shares rose 2.2 percent. The Dow Jones Industrial Average was down 0.13 percent to 13,086.80 points in midday trading. The broad-based S&P 500 lost 0.40 percent to 1,407.38 points, while the Nasdaq Composite gave up 0.27 percent to 2,978.10 points. While European stocks markets cheered the US growth figures, analysts cautioned the headline figure hid some concerning trends. "Third quarter US GDP has come in at 2.0 percent - a bit stronger than expectations – but the reading is not nearly as good as it looks at first glance," said ING bank analyst Rob Carnell. While consumer spending grew strongly, Carnell noted that business investment was flat and that much of the overall growth was due to a surge in government spending that was unlikely to last. DailyFX Currency Analyst Christopher Vecchio said "this is still not the stable recovery the Federal Reserve is looking for," and that it will likely step up its stimulus support for the US economy. European stocks had slid earlier in the day on disappointing US corporate results and record Spanish unemployment. Official data from Spain showed that its jobless rate broke the 25-percent barrier for the first time as austerity cuts squeezed the recession-struck economy. Tens of thousands of jobs were destroyed in the third quarter, even as Prime Minister Mariano Rajoy's government raised taxes, cut spending and pondered whether to snatch a eurozone rescue line. The unemployment rate rose to 25.02 percent in the third quarter from 24.63 percent in the previous three months, a National Statistic Institute report showed. Nevertheless, the yield on Spanish 10-year bonds slid to 5.593 percent from 5.616 on Thursday. Asian stock markets closed lower on Friday as dealers looked ahead to the release later in the day of US economic growth figures. "Through the course of this week, equity markets have been on the defensive as a result of disappointing US earnings, mixed signals on the global economy and perhaps some investor uncertainty about the outcome of the US presidential election on 6 November," said Neil MacKinnon, economist at financial group VTB Capital. In Europe on Friday, shares in Anglo American jumped 4 percent to 1,933.5 pence after the global miner said that its first female chief executive Cynthia Carroll would step down for personal reasons. The announcement of her decision to stand aside comes a day after Anglo American slashed its forecast for annual platinum production amid deadly strikes at the group's troubled South African operations.