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European shares close lower, hurt by U.S. jobs data

Published 12/03/2010, 01:18 PM
Updated 12/03/2010, 01:20 PM

* FTSEurofirst 300 index falls 0.2 pct

* U.S. jobless rate rises to 7-month high

* Losses pared as U.S. service sector grows 11th month

* Volvo gets lift from North America orders

By Joanne Frearson

LONDON, Dec 3 (Reuters) - European shares ended marginally lower on Friday after a weaker-than-expected U.S jobs report, although strong U.S. service sector figures helped pare losses.

The pan-European FTSEurofirst 300 index of top shares closed down 0.2 percent at 1,103.97 points. It ended the week up 1.6 percent, the first weekly gain since early November.

"We have had a strong week, but the worse-than-expected U.S. jobs data caused a fall," Matthew Brown, trader at Catalyst Markets, said.

U.S. nonfarm payrolls rose 39,000 in November, with private hiring up only 50,000. The jobless rate jumped to a seven-month high 9.8 percent, the Labor Department said.

Economists had expected payrolls to increase 140,000 last month and the unemployment rate to remain 9.6 percent.

"But investors are seeing it as a buying opportunity and the market pared losses. I think the overall trend is for European markets to push higher: other U.S. data remains positive and the ECB has been buying bonds, which has been supportive," Brown said.

The market got some support after U.S. services sector data came in slightly better than expected, growing for an 11th straight month in November.

Investor nerves over the euro zone peripheral debt crisis were eased after traders said the European Central Bank bought Portuguese and Irish bonds in modest amounts. The Thomson Reuters Peripheral Eurozone Countries Index gained 1.6 percent.

Technology stocks featured among the best performers, with the STOXX Europe 600 Technology 1.2 percent higher.

STMicroelectronics gained 7.1 percent after Exane upgraded the chipmaker to "outperform" from "neutral".

VOLVO JUMP-START

Truckmaker Volvo rose 4.7 percent after data showed industry orders for heavy-duty trucks in North America rose above some analysts' expectations.

Johnson Matthey was up 3.2 percent, helped by an increase in target price and estimates from Liberum Capital, which also repeated its "buy" rating on the company.

The technical picture also looked supportive, with the index's 50-day moving average continuing to trade higher than its 200-day moving average.

"Several elements allow us to expect further upside. Thus, the 50-day simple moving average is ascending and plays a support role," said Philippe Delabarre, technical analyst at Trading Central.

Drugmakers slipped after gains in the previous two sessions, with the STOXX Europe 600 Health Care down 0.7 percent.

AstraZeneca fell 0.6 percent after EU antitrust regulators raided its offices on suspected collusion to block the sale of cheaper generic versions of heartburn drug Nexium.

Europe's biggest retailer Carrefour lost 2.1 percent after Moody's Investor Service said it would place its A3 rating on review.

Across Europe, the FTSE 100 index was down 0.4 percent, Germany's DAX fell 0.1 and France's CAC 40 was 0.1 percent higher.

(Additional reporting by Harpreet Bhal; Editing by David Hulmes)

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