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Upbeat U.S. Economic Data Lift Foreign Markets

April 28, 2001|Reuters

Friday's report that the U.S. economy grew faster than expected in the first quarter cheered investors on the far side of the Atlantic.

European stocks reached a seven-week peak as the unexpectedly strong U.S. data fed hopes that the world's largest economy would escape a profit-crunching recession.

The broad Pan-European FTSE Eurotop 300 added 1.6% after touching its highest point since March 8. Germany's Extra DAX index rose 0.8%, while London's FTSE-100 index was up 1.4% and the CAC-40 in Paris climbed 1.7%.

Telecom equipment companies such as Nokia (ticker symbol: NOK), Alcatel (ALA) and Marconi(MONI)--all exposed to the U.S. economy--led the advance as the DJ Stoxx technology index gained 3.5%.

The preliminary U.S. gross domestic product rose 2% in the first quarter, the government said Friday, nearly double predictions.

The upbeat economic outlook was a bit of a reprieve for European markets that have been on edge for months amid growing signs that a sluggish U.S. economy was weighing on profits of European companies.

In the midst of the market euphoria, a few cautious words emerged. Robert Kerr, European equity strategist with Bank of America, said the GDP figures could be revised, adding that they stood in stark contrast to a recent spate of cautious outlooks from top companies. "The market has taken it well but I'd be very cautious," Kerr said. "The anecdotal evidence that we've seen really doesn't support this. If this is real, why couldn't the companies that have reported in the last several weeks see it coming?"

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