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Tags: World | Markets

Investors Wary of Buying Further into Rally

Wednesday, 13 March 2013 02:57 PM EDT

LONDON (AP) — Investors were hesitant to extend the stock market's week-long rally, leaving major indexes with little momentum on Wednesday despite more strong economic data out of the U.S.

A U.S. government report showed retail sales grew 1.1 percent in January from the previous month, almost twice as much as analysts' forecasts for a 0.6 percent gain. The rise showed consumer spending, which makes up for about three quarters of economic activity in the U.S., was unfazed by tax increases.

But the good news failed to inject much new momentum into a stock market that has been rallying steadily for a week, pushing the Dow to break a string of records and many other indexes to multi-year highs.

In Europe, Britain's FTSE 100 fell 0.5 percent to close at 6,481.50 while Germany's DAX edged up 0.1 percent to 7,970.91. France's CAC-40 fell 0.1 percent to 3,836.04.

Wall Street opened lower before recovering slightly — the Dow was flat at 14,456.13 after closing higher for eight consecutive days. The broader S&P 500 edged up 0.2 percent to 1,554.87.

Market sentiment had been dented earlier in the day, when official statistics showed that industrial production across the 17-country eurozone fell by 0.4 percent in January, worse than analysts' predictions for an unchanged reading. Both Germany and France, the two industrial powerhouses in the region, registered drops in production, suggesting the sector is contributing to keeping the eurozone in recession.

"January's fall in eurozone industrial production is a timely reminder that, despite the improvement in business and financial market sentiment, the region is likely to have remained in recession in the first quarter," said Ben May, analyst at Capital Economics in London.

That helped push the euro down 0.6 percent to $1.2959.

Earlier in Asia, Japan's Nikkei 225 index fell 0.6 percent to close at 12,239.66 as the yen stopped dropping and recovered against the dollar, which was down 0.1 percent against the Japanese currency at 96.06.

The yen has been weak against other currencies in recent weeks because of expectations of monetary easing by the Bank of Japan under the leadership of its incoming chief, Haruhiko Kuroda.

Kuroda has been critical of the central bank's policies in the past and is thought to back Prime Minister Shinzo Abe's strategies for seeking to revive Japan's economy by fighting deflation through monetary easing and hefty government spending.

South Korea's Kospi rose 0.2 percent to 1,997.69. Australia's S&P/ASX 200 lost 0.5 percent at 5,092.40.

Hong Kong's Hang Seng shed 1.5 percent to 22,556.65. Stocks in mainland China also fell. The Shanghai Composite Index tumbled 1.4 percent to 2,253.74. The smaller Shenzhen Composite Index lost 1.9 percent at 918.10.

In commodity markets, the benchmark contract for crude oil for April delivery was down 51 cents to $92.03 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 48 cents on Tuesday.


Pamela Sampson in Bangkok contributed to this report.

© Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Wednesday, 13 March 2013 02:57 PM
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