PARIS, July 22 — European stocks pushed back into positive territory but Wall Street traded mixed on Friday at the end of a choppy week, while Snap shares fell off a cliff after reporting bleak quarterly results.
Meanwhile, the euro came under pressure after a key survey suggested the single-currency area could be on the verge of recession due to slumping demand and rising costs.
A bigger-than-expected hike in interest rates by the European Central Bank failed to provide a lasting boost to the euro, as political turmoil in Italy clouds the outlook.
Nevertheless, following a mixed showing in Asia, stock prices in Europe were showing gains in afternoon trading, with London's FTSE 100 adding 0.5 percent, Paris' CAC 40 rising by 0.6 percent and the DAX in Frankfurt climbing 0.8 percent.
Economic activity in the eurozone plummeted in July, the closely watched purchasing managers' index, or PMI, showed, with a big drop in manufacturing and consumers' post-lockdown spending sprees braked by high prices.
The barometer fell from 52.0 in June to 49.4, below the 50-point level that indicates growth and the lowest level in 17 months.
The data "point to a fall in gross domestic product of 0.5 percent to 1.0 percent at the start of the third quarter, supporting our view that the eurozone economy is headed for a technical recession come the fourth quarter," said Melanie Debono, economist at Pantheon Macroeconomics.
Andrew Kenningham, economist at Capital Economics, agreed.
"The eurozone is teetering on the brink of recession. The ECB will have to follow up on yesterday's historic rate hike with several more in the coming months even though this will worsen the downturn," he said.
It has been a rollercoaster week as investors try to gauge the outlook -- corporate earnings have so far been relatively positive, but mixed economic data and geopolitical events are clouding sentiment.
Results by Snap, the owner of the Snapchat messaging app, landed like a bombshell, however, with quarterly losses nearly tripling to $422 million despite revenue increasing 13 percent under conditions "more challenging" than expected.
Its shares plummeted nearly 35 percent as trading got underway.
"Snap is getting bludgeoned," said market analyst Patrick J. O'Hare at Briefing.com.
He said the company refraining from providing specific guidance due to market uncertainty, that include a slowdown in online advertising, spooked investors.
"That gloomy view has pressured other stocks, like Meta Platforms and Alphabet that are beneficiaries of online advertising," he added. Meta owns Facebook and Alphabet is the parent company of Google.
Investors have been looking at second-quarter earnings to gauge how companies are weathering the impact of surging prices.
Wall Street's tech-heavy index shed 0.3 percent at the open, but both the blue-chip Dow and broader S&P 500 rose.
Earlier in Asia, markets had started brightly but lost some of their lustre as the day wore on.
Tokyo, Hong Kong, Mumbai, Taipei, Singapore, Manila and Jakarta all posted gains, but were off their highs, while Sydney was flat while Shanghai, Wellington and Seoul edged down.
OANDA analyst Jeffrey Halley said that a meeting next week by the US Federal Reserve would be watched closely by the markets.
"The statement will be crucial and, depending on how it plays out, could stop what I consider a bear market rally, in its tracks," he said in a note.
"Inflation remains and will remain stubbornly high, geopolitical risk abounds, growth is slowing around the world, and recession risks are rising. I can't see how that is a productive environment for equities, and that's before the rest of big-tech reports quarterly earnings." — AFP
London - FTSE 100: UP 0.5 percent at 7,306.65 points
Frankfurt - DAX: UP 0.8 percent at 13,351.85
Paris CAC 40: UP 0.6 percent at 6,239.57
EUROSTOXX 50: UP 0.7 percent at 3,621.36
New York - Dow: UP 0.5 percent at 32,191.72
Tokyo - Nikkei 225: UP 0.4 percent at 27,914.66 (close)
Hong Kong - Hang Seng Index: UP 0.2 percent at 20,609.14 (close)
Shanghai - Composite: DOWN 0.1 percent at 3,269.97 (close)
Euro/dollar: DOWN at $1.0185 from $1.0232 on Thursday
Pound/dollar: DOWN at $1.1974 from $1.2002
Euro/pound: DOWN at 85.07 pence from 85.22 pence
Dollar/yen: DOWN at 136.53 yen from 137.34 yen
West Texas Intermediate: DOWN 1.1 percent at $95.32 per barrel
Brent North Sea crude: DOWN 0.7 percent at $103.15 per barrel
