By Sara Sjolin, MarketWatch

U.K. inflation data on deck

European stocks continued to rise on Tuesday, with investors encouraged by North Korea's decision not to follow through with its threat to attack U.S. island territory Guam following a war of words between the two nations.

The Stoxx Europe 600 index advanced 0.3% to 377.41, adding to a 1.1% jump from Monday.

The positive trading mood has been spurred by receding fears that the U.S. and North Korea are heading toward a nuclear war.

U.S. officials over the weekend played down the threat of a military conflict, saying they instead were seeking diplomatic solutions (http://nation.foxnews.com/2017/08/13/mattis-and-tillerson-were-holding-pyongyang-account) with the isolated nation.

Further easing tensions, North Korean leader Kim Jong Un decided not to launch a threatened missile attack on Guam (http://www.marketwatch.com/story/north-korea-steps-back-from-plan-to-launch-missiles-at-guam-2017-08-14), Pyongyang's state media reported on Tuesday. The leader, however, warned that he could change his mind "if the Yankees persist in their extremely dangerous reckless actions."

Economic news: Economic growth in Germany unexpectedly slowed in the second quarter (http://www.marketwatch.com/story/german-growth-slows-unexpectedly-in-second-quarter-2017-08-15), with gross domestic product expanding 0.6%, compared with 0.7% at the start of the year. Analysts had forecast a 0.7% reading.

On the year, however, the economy grew 2.1%, up from a revised 2% in the first quarter.

"Germany's economic success story goes on and on and on. And there is very little reason to fear a sudden end to the current performance, even though some kind of slowdown from current growth rates looks almost inevitable," said Carsten Brzeski, chief economist at ING, in a note.

"The drivers supporting the domestic economy, like record high employment, higher wages and government consumption, might lose some momentum along the way, without turning negative," he added.

The euro extended its loss after the data, buying $1.1741, compared with $1.1782 late in New York.

Later in the morning, the closely watched July inflation data for the U.K. will be released. The report is seen as a key factor for the Bank of England to decide if it will raise interest rates in 2018.

The pound traded at $1.2942 ahead of the data, compared with $1.2964 late Monday in New York.

Indexes: Germany's DAX 30 index rose 0.3% to 12,199.18, while France's CAC 40 index was up 0.3% at 5,135.42. The U.K.'s FTSE 100 index climbed 0.1% to 7,362.91 (http://www.marketwatch.com/story/uk-stocks-rise-for-2nd-straight-day-ahead-of-key-inflation-data-2017-08-15).

Stock movers: Shares of Danone SA (DANOY) (DANOY) gained 2.5% after media reports that activist hedge fund Corvex Management has built a stake in the French dairy and water company.

Shares of Next PLC (NXT.LN) lost 2.8% after Berenberg cut its rating on the high-street retailer to sell from hold.

Hargreaves Lansdown PLC (HL.LN) fell 1.5% even after the financial services company reported a 20% jump in full-year profit (http://www.marketwatch.com/story/hargreaves-lansdown-full-year-profit-jumps-20-2017-08-15).

K+S AG (SDF.XE) slid 4.5% after the fertilizer company warned it won't reach its 2020 earnings target because of weak potash prices.

 

(END) Dow Jones Newswires

August 15, 2017 04:08 ET (08:08 GMT)

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