Berliner Boersenzeitung - European stocks rally, Wall Street slumps on interest rate concerns

European Central Bank policymakers delivered another interest rate increase as anticipated, with eurozone consumer prices still rising fast.

But ECB chief Christine Lagarde sent dovish signals, leaving open the possibility of a pause in its streak of rate hikes as the eurozone's economic outlook has deteriorated.

Frankfurt set a record close, while Paris and London logged gains as well.

"We've seen a strong session ... as investors increasingly adopt the view that central banks could be done when it comes to further rate hikes," said analyst Michael Hewson at CMC Markets.

He added that the latest set of economic numbers "pointed to a goldilocks scenario for the US economy."

The US Federal Reserve, as expected, also raised borrowing costs again on Wednesday as it seeks to bring inflation down further, but there remain lingering worries of more aggressive actions ahead.

Wall Street stocks tumbled on resurgent concerns about higher rates, after US second-quarter gross domestic product growth topped expectations.

FHN Financial's Chris Low said the jump in the yield on the 10-year US Treasury note above four percent reflected a rethink of Fed Chair Jerome Powell's commentary on Wednesday, when the US central bank lifted rates and kept alive the possibility of more hikes.

- Bullish stride -

Powell said his staff were of the view that the world's top economy could dodge a recession, a situation many had bet on earlier in the year.

Data out Thursday showed that the US economy confounded expectations with growth accelerating in the second quarter.

GDP growth came in at an annual rate of 2.4 percent for the April-June period, above analyst forecasts and rising from the two percent rate in the first three months of 2023.

Meanwhile, first time jobless claims came in below expectations and June durable goods orders were stronger than expected, also showing the resilience of the US economy in the face of higher interest rates.

The market has maintained its "bullish stride, underpinned by good vibes related to earnings, the economy, and monetary policy in addition to a fear of missing out on further gains," said Briefing.com analyst Patrick O'Hare.

On the corporate front, traders continued to assess earnings, with Facebook parent Meta beating market expectations amid rebounding spending on digital ads.

Shares in Meta ended 4.4 percent higher, and others that rose after reports included Comcast and McDonald's.

Samsung Electronics posted plunging profits on weak demand for memory chips, while energy majors including Shell and TotalEnergies revealed heavy earnings falls after oil and gas prices retreated.

Friday sees the Bank of Japan decide over its monetary policy.

Investors are also keeping an eye on China after it announced plans to provide support to key parts of its economy, particularly the struggling property sector, after a string of weak data showing the post-Covid recovery had run out of steam.

- Key figures around 2030 GMT -

New York - Dow: DOWN 0.7 percent at 35,282.72 points (close)

New York - S&P 500: DOWN 0.6 percent at 4,537.41 (close)

New York - Nasdaq: DOWN 0.6 percent at 14,050.11 (close)

London - FTSE 100: UP 0.2 percent at 7,692.76 (close)

Frankfurt - DAX: UP 1.7 percent at 16,406.03 (close)

Paris - CAC 40: UP 2.1 percent at 7,465.24 (close)

EURO STOXX 50: UP 2.3 percent at 4,447.44 (close)

Tokyo - Nikkei 225: UP 0.7 percent at 32,891.16 (close)

Hong Kong - Hang Seng Index: UP 1.4 percent at 19,639.11 (close)

Shanghai - Composite: DOWN 0.2 percent at 3,216.67 (close)

Euro/dollar: DOWN at $1.0978 from $1.1089 on Wednesday

Pound/dollar: DOWN at $1.2794 from $1.2943

Euro/pound: UP at 85.78 from 85.65 pence

Dollar/yen: DOWN at 139.44 yen from 140.34 yen

Brent North Sea crude: UP 1.6 percent at $84.24 per barrel

West Texas Intermediate: UP 1.7 percent at $80.09 per barrel

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(A.Lehmann--BBZ)