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US stocks seen flat as Europe falls following Nice terror attack

July 15,2016 14:08

The U.S. State Department has confirmed two U.S. citizens were killed in the attack. The benchmark French CAC 40 index traded down 0.6 percent on Friday morning, slightly underperforming the pan-European STOXX 600, which fell by 0.4 percent.and more »



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U.S. stock indexes were called flat on Friday, as European shares fell following a terror attack in France that killed at least 84 people.

Late on Thursday, a man driving a truck mowed down crowds of people in Nice watching a fireworks display to celebrate Bastille Day. French President Francois Hollande says the attack was of a "terrorist nature" and has extended France's "state of emergency" for three months.

The U.S. State Department has confirmed two U.S. citizens were killed in the attack.

The benchmark French CAC 40 index traded down 0.7 percent on Friday morning, slightly underperforming the pan-European STOXX 600, which fell by 0.5 percent.

European indexes

"Of course, everything today in Europe will be of secondary importance to last night's terror incident in Nice. And the related economic concerns are of lesser relevance to the human costs," Emily Nicol, economist at Daiwa Capital Markets, said in a note on Friday.

"Indeed, with the French economy having proved to be relatively resilient to the previous Bataclan incident, the economic consequences need not be marked, although demand in the French services sector, not least the tourism sector — the world's biggest — might be adversely affected over the near term," she added.

Overnight, China posted second-quarter gross domestic product (GDP) growth of 6.7 percent on the year, beating estimates for 6.6 percent by economists polled by Reuters and matching growth in the first quarter. China's benchmark Shanghai Composite index responded somewhat mutedly and closed flat on the day, posting a weekly gain of around 2.2 percent.

Citigroup, Wells Fargo earnings

In the U.S., earnings season was in full swing, with Citigroup, US Bancorp and Wells Fargo set to post second-quarter results on Friday. On Thursday, JPMorgan Chase reported earnings that easily beat expectations, while BlackRock's were in line with forecasts.

"If Citigroup comes out and they miss, then it starts to get people a little bit more concerned," Robert Pavlik, chief market strategist at Boston Private Wealth, said. "But I think as we move a little bit more into earnings season, we'll get some of the other banks falling in line."

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Stocks ended Thursday with new highs in both the S&P 500 and the Dow Jones industrial average. The Dow was up 0.7 percent at 18,506 and the S&P closed at 2,163, up a half percent. If the S&P 500 closes at a new high on Friday, it will be the first full week of new highs for the index since March 1998, according to Standard & Poor's.

The deciding factor could be the top-tier economic data due from the U.S. on Friday. These include June inflation, retail sales and industrial production, as well as the University of Michigan consumer sentiment survey for July and May business inventories data.

In corporate news, German chemical and drug company, Bayer, had bumped its bid offer to $125 per share for Monsanto. The seed giant is also looking at purchasing BASF's agro-chemicals unit, according to media reports.

London-listed shares of BP traded 0.9 percent lower on Friday after the company agreed to a new $5.2 billion charge relating to the 2010 Gulf of Mexico spill. This brings the total cost of the incident for the company to around $61.6 billion.

—With contribution from CNBC's Patti Domm, Arjun Kharpal, Fred Imbert and Kate Rooney.

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