FOR: World stocks mixed as markets look to more economic rescue plans recession
LONDON
World stocks were mixed Thursday, as investors weighed more grim economic data against expectations that central banks and governments would continue to announce new economic rescue measures.
Most markets were marked by slim, uneven trade after Wall Street dipped overnight as early enthusiasm about the Federal Reserve's historic rate cut on Tuesday gave way to concerns that a turnaround in the U.S. economy was still far off.
Investors were keeping a close eye on reports that President-elect Barack Obama is laying the groundwork for a giant U.S. economic stimulus package, possibly $850 billion over two years.
By noon in Europe, Britain's FTSE-100 was down 2.39 percent to 4,321.80, Germany's DAX gained 0.88 percent to 4,749.77, and France's CAC 40 was off 0.85 percent to 3,214.44.
Peoples walk by an electric market board in Tokyo, Thursday, Dec. 18, 2008. (AP Photo/Katsumi Kasahara)
The markets were sending out a "confused signal" against a background of reduced trading volumes in the run-up to the holiday season, said Stephen Pope, chief global markets strategist at Cantor Fitzgerald.
"The news isn't all that encouraging and I don't think there's enough to swing one way or another," Pope said.
The Munich-based Ifo Institute said Thursday that German business confidence fell to its lowest point in over a quarter century in December as the global economic crisis stanched near-term prospects. The monthly index of business sentiment in Europe's largest economy slipped to 82.6 points in December from 85.8 points in November.
"The Ifo was lower than expected, which has again put a bit of a dampener on overall sentiment," said Pope.
Dutch ASML Holding NV, a key supplier to Intel Corp. and other computer chip makers, said it would slash 1,000 jobs - more than 10 percent of its global work force - following a plunge in orders.
In Britain, retail sales rose a monthly 0.3 percent in November, surprising analysts expecting a drop, but government debt ballooned to its highest in almost a quarter century, official figures showed.
In New York, futures pointed to a rebound Thursday on Wall Street after losses on Wednesday. Dow Jones industrial average futures were up 72 points, or 0.8 percent, to 8,872, and Standard & Poor's 500 index futures were up 5 points, or 0.6 percent, to 908.
On Wednesday, the Dow lost 1.12 percent while the S&P slipped 0.96 percent to 904.4.
In Asia, Japan's Nikkei 225 stock average climbed 54.71 points, or 0.6 percent, to 8,667.23 after flitting in and out of negative territory in morning trading. Hong Kong's Hang Seng Index recovered near the end of the session to add 0.2 percent to 15,497.81.
Benchmarks in Australia, South Korea, Singapore and mainland China also advanced.
The dollar recovered slightly from 13-year lows against the yen but continued to slide against the euro.
Asia's markets have shown surprising strength since rebounding from last month's sell-off, though some analysts were skeptical that the upswing would last.
"This is not the start of a bull market, it's still a bear market rally," said Francis Lun, general manager of Fulbright Securities Ltd. "The economy is still in the doldrums, and I think people are thinking the zero interest rate policy is due to a long recession ahead."
The U.S. rate cut has raised expectations the Bank of Japan will follow suit and slash its key rate to nearly zero when it wraps up a two-day meeting Friday. Goldman Sachs predicts the bank will shave its overnight call rate target from the current 0.3 percent to 0.15 percent, while JP Morgan forecasts a cut to 0.1 percent.
Oil prices, meanwhile, edged up from 4 1/2-year lows as investor pessimism over global crude demand outweighed OPEC's largest-ever production cut. The January contract fell as low as $39.19 - a level not seen since at least July 2004 - before recovering to $40.59 a barrel in Asian trade, up 53 cents from the New York close.
In China, a new stimulus package unveiled Wednesday to boost the country's slumping real estate market lifted shares in property firms. China Overseas was up 1.6 percent and China Resources gained 2.8 percent in Hong Kong trade.
The yen leveled off after a dramatic surge against the dollar, as Japan warned of possible intervention in the foreign exchange market. The dollar, which hit a 13-year low Wednesday, traded at 88.03 yen, up from 87.21 earlier. The euro rose to $1.4451 from $1.4400.
Finance Minister Shoichi Nakagawa told reporters he would "implement appropriate measures" regarding the yen's gains, which erodes exporters' foreign income.
"For export manufacturers the acceleration of the strong yen is a negative factor," he said.
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AP writers Jeremiah Marquez in Hong Kong, Jay Alabaster in Tokyo and Alex Kennedy in Singapore contributed to this report.
