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European stocks trim gains after U.S. data

Published 08/13/2009, 09:25 AM
Updated 08/13/2009, 09:27 AM
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* FTSEurofirst 300 index up 0.8 percent

* Pares gains after U.S. data

* Banks gain; insurer Prudential up

By Brian Gorman

LONDON, Aug 13 (Reuters) - European shares were propelled to nine-month highs on Thursday as France and Germany returned to economic growth, though gains were pared by worse-than-expected U.S. weekly jobless claims and retail sales data.

At 1304 GMT, the FTSEurofirst 300 index of top European shares was up 0.8 percent at 949.64 points, having earlier touched a nine-month high of 956.10 points.

Banks added most points to the index. BNP Paribas, Deutsche Bank, HSBC and UBS added between 1.7 and 4.2 percent.

Among other financials, Britain's biggest insurer, Prudential, climbed 8.3 percent after it reported stronger-than-expected half-year profits and raised its interim dividend.

Sales at U.S. retailers unexpectedly fell in July from June, a government report showed, casting a shadow over an anticipated rebound in consumer spending in the third quarter.

The Commerce Department said total retail sales edged down 0.1 percent after rising a revised 0.8 percent in June. Sales in June were initially reported to have risen 0.6 percent.

Initial new jobless claims rose to 558,000 last week, up from 554,000 the previous week. Analysts had expected a drop to 545,000, from the previously reported 550,000.

Futures for the Dow Jones, S&P 500 and Nasdaq were up between 0.5 and 0.6 percent, having been higher previously.

"Retail Sales figures out this afternoon are a reality check for the market. Coupled with a rise in those claiming unemployment benefit, it is difficult to get overly bullish on stocks," said Manoj Ladwa, senior trader, ETX Capital.

Germany and France achieved a surprise return to economic growth in the second quarter of the year, ending their recessions earlier than many policymakers and economists had expected.

Meanwhile, the euro zone economy shrank less than expected in the second quarter, data showed, adding to signs the worst of the recession could be over.

Across Europe, Britain's FTSE 100, Germany's DAX and France's CAC-40 were up between 0.7 and 1.2 percent. (Editing by Will Waterman)

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