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European stocks higher on corporate earnings data

European stocks

The Stoxx 600 Index edged higher as Rolls-Royce Holdings Plc and Siemens AG gained

Stocks in Europe jumped with U.S. equity futures on Thursday as investors balanced strong corporate earnings against the threat to the economic recovery from the spread of the delta variant of coronavirus.

The Stoxx 600 Index edged higher, with Rolls-Royce Holdings Plc gaining after announcing a surprise first-half profit and Siemens AG up after the German engineering company posted better-than-expected third-quarter results.

In Asia, equities edged up in Japan but dropped in Hong Kong and China as Beijing’s regulatory measures continue to dominate the agenda. Contracts on the S&P 500 Index added 0.2%.

Treasuries were little changed with the dollar, while oil was steady after several days of losses on the risks to demand due to the delta variant, especially in the key market of China.

With stocks at or near record highs, investors are keeping an eye on the fast-spreading delta variant of the coronavirus, resulting in new mobility curbs and a rally in sovereign debt. Also on the agenda are prospects of a pullback in stimulus after Vice Chairman Richard Clarida said on Wednesday the Fed is on track for a liftoff in interest rates in 2023.

The U.S. job market remains a key window onto the outlook, with the latest economic data showing a much softer-than-expected ADP employment report but a record expansion for U.S. service industries. American jobs data are due Friday.

Employment getting back to full capacity, is going to be an important marker for the Fed to start to taper, Erin Browne, multi-asset strategies portfolio manager at Pacific Investment Management Co., said on Bloomberg Television.

He said: You’re going to continue to see growth numbers look quite robust — remember, we both have monetary support which is fading but still out there, as well as fiscal support across developed markets which are supporters for growth.

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