European Markets Dropped On First Day Of 2014

(RTTNews) - The European markets ended the first trading day of the 2014 in negative territory. Investor sentiment was impacted by the decrease in Chinese manufacturing activity. The weak opening of the U.S. markets in the afternoon also added to the negative mood among investors. One notable exception to Monday's weakness was Fiat, which surged after it reached a deal with Chrysler.

French President Francois Hollande has reiterated his pledge to reduce unemployment and announced new measures to achieve the same. In his televised New Year's address on Tuesday, Hollande put an offer to companies that will allow lower labor charges for hiring more staff.

He had vowed to bring down unemployment by the end of 2013. However, recent figures from the labor ministry revealed that jobless claims rose 0.5 percent in November to 3.292 million, following a surprise fall in the previous month.

Citing data over several months, the ministry said the rising trend in unemployment has started to reverse in the fourth quarter. Meanwhile, Hollande's popularity ratings have plummeted to the worst levels for any French president.

Spanish Economy Minister Luis De Guindos said there will be significant fall in unemployment this year. The net job creation in 2014 will be higher than the government predicted in the budget last September, he told Cadena Ser national radio in an interview on Wednesday.

The labor reform will make the market more dynamic, he said. The jobless rate is expected to fall to 25.9 percent this year.

The Euro Stoxx 50 index of eurozone bluechip stocks declined by 1.46 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.84 percent.

The DAX of Germany dropped by 1.59 percent and the CAC 40 of France fell by 1.60 percent. The FTSE 100 of the U.K. decreased by 0.46 percent, but the SMI of Switzerland was closed.

In Frankfurt, RWE declined by 3.61 percent. The utility reportedly may ask shareholders to give it the option to boost capital. E.ON also fell by 2.68 percent.

In Paris, utility Veolia Environnement decreased by 2.49 percent.

Peugeot increased by 2.54 percent and Renault finished down by 0.46 percent. French car sales increased by 9.4 percent in December from the previous year, raising hopes of recovery in auto demand.

In London, Debenhams climbed by 2.95 percent. The company said Simon Herrick has decided to resign from his role as Chief Financial Officer and as a director of the company with immediate effect.

CRH rose by 1.05 percent, after it announced a new chief executive.

Aberdeen Asset Management fell by 2.00 percent, after Credit Suisse downgraded it to "Neutral" from "Outperform."

In Milan, Fiat surged by 16.40 percent. The carmaker struck a deal with the UAW Retiree Medical Benefits Trust to buy the remaining 41.46 percent stake in U.S. automaker Chrysler Group LLC for $3.65 billion.

A gauge of China's manufacturing activity declined in December, in line with the flash estimate released last month, detailed results of a survey by Markit Economics and HSBC revealed Thursday. The headline purchasing managers' index, a measure of the health of the entire manufacturing industry, fell to a three-month low of 50.5 in December from 50.8 in November.

Eurozone's manufacturing sector growth picked up further in December, as estimated in the flash report published last month, detailed results of a survey by Markit Economics showed Thursday. The headline purchasing managers' index rose for the third month running to post 52.7 in December. The reading was unchanged from the flash reading and was higher than November's score of 51.6.

The German manufacturing sector expanded slightly more than initially estimated in December, final data from Markit Economics showed Thursday. The Markit/BME Purchasing Managers' Index rose to 54.3 in December from 52.7 in November. The score was slightly above the initial estimate of 54.2.

German employment reached another record high in 2013, but the rise in employment was only about half of the average of 2011 and 2012, a report published by Destatis said Thursday. An average of 41.78 million persons were employed in 2013, up 232,000 or 0.6 percent from the previous year. Employment hit a record for the seventh month in a row.

The French manufacturing sector contracted at a faster rate in December than estimated earlier, revised data released by Markit Economics and CDAF revealed Thursday. The seasonally adjusted purchasing managers' index (PMI) for the manufacturing sector dropped to 47 in December from 48.4 in November, hitting the lowest level in seven months. The flash estimates were for a reading of 47.1 in December.

U.K.'s manufacturing recovery remained on track at the end of 2013, survey data from Markit Economics revealed Thursday. However, the Markit/Chartered Institute of Purchasing & Supply Purchasing Managers' Index fell to 57.3 in December from November's 33-month high of 58.1. The November score was revised from 58.4.

First-time claims for U.S. unemployment benefits showed a modest decrease in the week ended December 28th, according to a report released by the Labor Department on Thursday, with claims falling in line with economist estimates.

The report said initial jobless claims dipped to 339,000, a decrease of 2,000 from the previous week's revised figure of 341,000. The figure from the previous week was upwardly revised from the 338,000 originally reported.

After reporting growth in U.S. manufacturing activity at the fastest pace in over two years in the previous month, the Institute for Supply Management released a report on Thursday showing a modest slowdown in the pace of growth in December.

The ISM said its purchasing managers' index edged down to 57.0 in December from 57.3 in November, although a reading above 50 till indicates growth in the manufacturing sector. The modest decrease by the index matched economist estimates.

With an increase in spending in private construction more than offsetting a drop in spending on public construction, the Commerce Department released a report on Thursday showing that U.S. construction spending rose in line with economist estimates in the month of November.

The Commerce Department said construction spending rose 1.0 percent to a seasonally adjusted annual rate of $934.4 billion in November from the revised October estimate of $925.1 billion. The increase in spending matched economist estimates.