NY Times European Stocks Drift Lower on Spanish Recession By _DAVID JOLLY_ (http://topics.nytimes.com/top/reference/timestopics/people/j/david_jolly/index.html?inline=nyt-per) Published: April 30, 2012
PARIS — Stocks fell modestly in Europe on Monday, after confirmation that Spain had slumped back into recession in the first three months of 2012. The Spanish economy contracted by 0.3 percent in the January-March quarter, the same rate of contraction as in the last quarter of 2011, the National Statistics Institute said in Madrid. The common definition of a recession is two consecutive quarters of real economic decline. The Euro Stoxx 50 index, which tracks euro zone blue-chip shares, fell 1.6 percent by the close of trading. The FTSE 100 index in London was down 0.7 percent. The Spanish economic news was not quite as bad as anticipated — a Reuters poll had found a market consensus for a quarterly contraction of around 0.4 percent. Compared with the first quarter a year earlier, the Spanish economy shrank by 0.4 percent. Still reeling from the collapse of a property market bubble, Spain is seeking to enact austerity measures to restore government finances, even as it grapples with an unemployment rate of 24.4 percent. The market reaction was muted, with Spanish and other bond yields — the subject of intense scrutiny since the euro crisis began — essentially unchanged. The data suggested that “the Spanish economy is not shrinking as rapidly as the other southern European economies,” Ben May, an economist in London with Capital Economics, noted in a report. But he cautioned that “the full effects of the recent fiscal measures on economic growth will not have yet been fully felt.” He predicted the recession would “deepen over the remainder of the year,” with an overall 2012 contraction of about 1.5 percent this year and another 3.0 percent next year. The Continent was trading nearly on autopilot, as many investors were taking advantage of the May Day holiday on Tuesday to take a four-day weekend. The dollar was mixed against other major currencies. The euro fell to $1.3225 from $1.3238 late Friday in New York, while the British pound rose to $1.6245 from $1.6266. But the dollar fell to 80.09 yen from 80.27 yen. Markets were closed in much of Asia, including Japan and mainland China. In Hong Kong, the Hang Seng index rose 1.6 percent, while the Australian benchmark index gained 0.8 percent. -- Centroids: The Center of the Radical Centrist Community <[email protected]> Google Group: http://groups.google.com/group/RadicalCentrism Radical Centrism website and blog: http://RadicalCentrism.org
