World stocks rise, but growth concerns temper gains

[August 26, 2010]  LONDON (AP) -- World stock markets mostly rose Thursday, helped by late gains on Wall Street and more strong German data, though apprehension over a slowing U.S. economy and its impact on the global recovery capped the advance.

The tentative rise snapped a lengthy losing streak, but investors remain cautious ahead of more economic indicators from the U.S. Recent figures from China to the U.S. have pointed to the global economy slowing in the second half of the year and markets are now looking for signs of how deep the downturn will be.

"We should have some rebound, a little bounce, not much," said Jackson Wong vice president at Tanrich Securities in Hong Kong. "We are waiting for clues from the U.S."

Britain's FTSE 100 stock average was up 0.5 percent at 5,135.82 while Germany's DAX was 0.2 percent higher at 5,91052. France's CAC-40 was up 0.4 percent at 3,465.54.

Japan's Nikkei 225 advanced 0.7 percent to 8,906.48 after hitting a 16-month closing low the previous day, after the yen hit a fresh 15-year high against the dollar.

In Europe, gains were helped by another strong economic report from Germany. The GfK institute said its forward-looking indicator for consumer confidence edged up to 4.1 points for September from the 4.0 points it registered in August.

That followed a rise in German business confidence the day before and shows Europe's largest economy is still enjoying relatively low unemployment and a recovery in demand. Still, analysts note that the country has yet to implement its toughest austerity cuts and may yet feel the pinch of a drop in demand from big trading partners such as the U.S. and China.

Corporate news was also relatively good in Europe. Diageo PLC, the world's biggest spirits maker, said full-year profits rose 1.5 percent as sales in emerging markets fueled a rebound from a weak first half. Investors, however, had been expecting somewhat strong results and let the shares slip 0.9 percent in London.

Looking ahead, Wall Street was expected to show little momentum -- Dow Jones industrial average futures were flat at 10,043 while Standard & Poor's 500 futures were up 0.2 percent at 1,056.80.

The day before, the Dow managed to close higher after having been down as much as 102 points after yet another batch of worrying economic figures -- new home sales fell to a record low and durable goods orders were anemic.

That cemented fears that the economic recovery is losing steam. Buying interest picked up only steadily after that as traders hunted for beaten-down stocks.

Key data due out this week include weekly jobless claims on Thursday and revised gross domestic product on Friday, which will provide the latest snapshot of the world's largest economy.

Also watched will be a speech by Federal Reserve Chairman Ben Bernanke at the annual Jackson Hole Economic Symposium in Wyoming.

Economists predict that the U.S. economy expanded during the three months from April through June at an annual rate of 2 percent, a slower pace than originally reported.

Elsewhere, China's Shanghai Composite rose 0.3 percent to 2,603.48, Australia's S&P/ASX 200 added 0.8 percent to 4,356.00 and India's Sensex was 0.3 percent higher at 18,232.01.

Some Asian markets were unable to hold on to gains, however. Hong Kong's Hang Seng flitted between positive and negative territory, finally closing 0.1 percent lower at 20,612.06. South Korea's Kospi finished 0.3 percent down at 1,729.76.

In Tokyo, shares in exporters were mixed amid the yen's movements -- a higher currency makes their products less competitive on the international market. Toyota Motor Corp. rose 0.6 percent to close at 2,928 yen and Honda Motor Co. was up 1.8 percent to 2,766 yen. Sony Corp., however, fell 0.4 percent to 2,376 yen.

After hitting a 15-year high against the dollar and nine-year high against the euro on Tuesday, the dollar was trading at 84.47 yen on Thursday, down somewhat from 84.71 yen the night before in New York. The euro rose to $1.2701 from $1.2667, boosted by the upbeat German report.

Benchmark crude for October delivery was up 66 cents at $73.18 a barrel by late morning European time in electronic trading on the New York Mercantile Exchange. The contract rose 89 cents to settle at $72.52 a barrel on Wednesday.

[Associated Press; By CARLO PIOVANO]

Associated Press writers Kelly Olsen in Seoul and Tomoko A. Hosaka and Shino Yuasa in Tokyo contributed to this report.

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