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European stocks dip on ECB doubts, US stocks rise

Bourses in Europe retreated Tuesday on fresh doubts over the likelihood of European Central Bank stimulus, while strong online shopping sales helped lift US stocks. Both Frankfurt and Paris shed around one percent, with Spain and Italy experiencing smaller declines, as investors viewed improving eurozone data as a potential threat to more monetary stimulus. Eurozone unemployment hit its lowest level for nearly four years in October, beating analyst expectations and confirming a slow recovery in Europe's job market. Markit Economics said its Purchasing Managers Index (PMI) for the eurozone rose to 52.8 in November from 52.3. "Good news may dissuade (ECB chief) Mario Draghi from pulling the trigger on more ECB QE, hopes of which have caused the eurozone indices to climb of late," said analyst Connor Campbell at traders Spreadex. In the US, the broad-based S&P 500 climbed 1.1 percent, with the gains most pronounced among retailers and large pharma companies. London gained 0.6 percent as the Bank of England said Britain's seven top lenders passed its latest stress tests, boosting the financial sector. In Asia, Chinese stocks rose 0.3 percent as the International Monetary Fund's decision to include the yuan in its reserve currency basket offset news that a gauge of Chinese factory activity had hit a more than three-year low. - 'Cyber Monday' sales strong - US retailers, which suffered declines Monday on lackluster shopping data from the "Black Friday" weekend, rebounded for the most part after good results from "Cyber Monday." One leading market tracker said sales for the big online shopping day were up 14 percent from a year ago, as consumers thronged to their desktops and smartphones to take advantage of holiday promotions. Most impressive was online powerhouse, Amazon, which jumped 2.2 percent. Among brick-and-mortar stores, Target rose 0.4 percent, Macy's 0.6 percent and Williams-Sonoma 1.0 percent. "The initial retail news over the weekend was pretty bleak, with the number of people shopping in stores was way down from last year," said Chris Low, chief economist at FTN Financial. "But it turns out sales are not bad, as there was a big increase in people shopping online." Among pharma names, Pfizer rose 2.6 percent, Merck 2.9 percent and Bristol-Myers Squibb 1.9 percent after Barclays raised its price targets for all three companies. The gains in the US came despite a worrisome read on the manufacturing sector, which showed signs of the effect of the strong dollar and falling energy prices. The Institute for Supply Management purchasing managers index for the manufacturing sector dropped to 48.6 in November, marking the first contraction in three years. The dreary ISM data, coupled with the better statistics out of the eurozone, helped the euro to rebound to $1.0634 from $1.0566. However, some analysts continued to see the odds of ECB stimulus as strong given weak inflation. The eurozone's inflation rate stood at zero in October, climbing out of negative territory but remaining far below the ECB's target of about 2.0 percent. "Draghi is still concerned about sluggish inflation and growth in the eurozone, so the ECB could announce further stimulus measures," noted Currencies Direct analyst Amir Khan. - Key figures around 2200 GMT - New York - Dow: UP 1.0 percent at 17,888.35 (close) New York - S&P 500: UP 1.1 percent at 2,102.63 (close) New York - Nasdaq: UP 0.9 percent at 5,156.31 (close) London - FTSE 100: UP 0.6 percent at 6,395.65 (close) Frankfurt - DAX 30: DOWN 1.1 percent at 11,261.24 (close) Paris - CAC 40: DOWN 0.9 percent at 4,914.53 (close) EURO STOXX 50: DOWN 0.8 percent at 3,479.64 (close) Tokyo - Nikkei 225: UP 1.3 percent at 20,012.40 (close) Euro/dollar: UP to $1.0634 from $1.0566 late Monday Dollar/yen: DOWN to 122.86 yen from 123.09 yen