An opening fall on Wall Street following slightly weaker than expected economic data has put more pressure on European markets.
The Dow Jones Industrial Average is down around 40 points in early trading following the latest US economic growth figures. The country's GDP grew by an annualised 2.8% - the fastest pace for around 18 months - but the figure was just below expectations of a 3% rise. Analysts pointed out that signs of stock rebuilding by businesses and slower spending on capital goods suggested a slowdown in growth later in the year.
The figures do however reinforce why US Federal Reserve chairman Ben Bernanke talked on Wednesday about low interest rates until at least 2014. And why economists expect another round of quantitative easing from the US central bank. Rob Carnell at ING Bank said:
[The 2.8% growth figure] was a weaker than expected result, and, moreover, it sets us up for a weak GDP reading for the first quarter of 2012, with a likely partial reversal of some of the inventory building in the fourth quarter. As such, we might well get something closer to the 2.0% mark, than 3.0%, and this will continue to keep thoughts of the first Fed tightening out somewhere in 2014.
With Wall Street lower, the FTSE 100 is now down 44.13 points at 5751.07 while France's CAC is more than 1% lower and Germany's Dax is down around 0.4%. Investors are still awaiting further news of the progress of talks between Greece and its bondholders, as well as worrying about Portugal being next in the firing line.
