European Markets Were Unable To Hold Gains Ahead Of U.S. Jobs Report

(RTTNews) - The European markets got off to a positive start Thursday. Investors were encouraged after China's official manufacturing PMI beat market expectations in August, expanding at its fastest pace in nearly two years.

However, the markets began to pare their gains in the afternoon and firmly entered negative territory after the weak opening on Wall Street. Traders remain anxious ahead of tomorrow's highly anticipated U.S. jobs report for August. The strength of the jobs data is likely to have a significant impact on expectations regarding whether the Federal Reserve will raise interest rates at its next meeting later this month.

The pan-European Stoxx Europe 600 index weakened by 0.02 percent. The Euro Stoxx 50 index of eurozone bluechip stocks decreased 0.19 percent, while the Stoxx Europe 50 index, which includes some major U.K. companies, lost 0.37 percent.

The DAX of Germany dropped 0.55 percent, but the CAC 40 of France rose 0.03 percent. The FTSE 100 of the U.K. declined 0.52 percent and the SMI of Switzerland finished lower by 0.73 percent.

Spain's IBEX 35 index finished up 0.53 percent despite the country's acting Prime Minister, Mariano Rajoy, losing a parliamentary bid for a second term in office.

In Frankfurt, Commerzbank climbed 1.97 percent, but Deutsche Bank lost 0.98 percent after reports they held merger talks earlier this month.

Volkswagen fell 0.52 percent, after Australia sued the local arm of German automaker for allegedly misleading consumers over emissions testing.

Utility E.ON dropped 3.83 percent and peer RWE weakened by 2.97 percent.

In Paris, Pernod Ricard advanced 2.33 percent. The spirits maker reiterated its medium-term sales growth target after reporting a 2 percent rise in full-year 2015/16 underlying profit.

Technicolor surged 5.12 percent after Moody's raised its rating on the stock to 'Ba3' from "B1."

In London, Inmarsat gained 0.58 percent as the satellite telecommunications company successfully placed $650 million convertible bonds due 2023.

Hays fell 0.38 percent. The recruitment firm warned of increased uncertainty in its UK and Ireland markets following the Brexit vote.

Elekta rallied 1.50 percent in Stockholm after its first quarter core profit topped forecasts.

Eurozone manufacturing sector expanded at the slowest pace in three months in August, final data from Markit showed Thursday. The Purchasing Managers' Index fell to 51.7 in August from 52 in July. The flash reading was 51.8.

U.K. manufacturing activity rebounded unexpectedly in August, survey data from Markit showed Thursday. The factory Purchasing Managers' Index rose to 53.3 from the 41-month low of 48.3 posted in July following the EU referendum. The score was expected to rise to 49.

Chinese factory activity stagnated in August following an improvement in the previous month, a private survey showed Thursday. However, the official survey showed that the manufacturing sector recovered unexpectedly in August.

The Caixin manufacturing Purchasing Managers' Index fell to 50 in August from 50.6 in July, survey results from Markit revealed. Economists had expected the reading to fall to 50.1.

Meanwhile, the official PMI rose to 50.4 from 49.9 in July. The score was expected to remain at 49.9. At the same time, the non-manufacturing PMI dropped to 53.5 in August from 53.9 a month ago.

A day ahead of the release of the highly anticipated monthly jobs report, the Labor Department released a report on Thursday showing a modest uptick in first-time claims for U.S. unemployment benefits in the week ended August 27th.

The report said initial jobless claims crept up to 263,000, an increase of 2,000 from the previous week's unrevised level of 261,000. Economists had expected jobless claims to rise to 265,000.

Labor productivity in the U.S. declined by slightly more than initially estimated in the second quarter, according to a report released by the Labor Department on Thursday.

The Labor Department said productivity fell by 0.6 percent in the second quarter compared to the previously reported 0.5 percent decrease. The revision matched economist estimates.

Meanwhile, the Labor Department said unit labor costs shot up by an upwardly revised 4.3 percent during the second quarter. Economists had expected a slight upward revision to the pace of labor cost growth to 2.1 percent from the originally reported 2.0 percent.