World stocks shrug off US economy pessimism

[June 07, 2011]  BANGKOK (AP) -- World stock markets climbed Tuesday, shrugging off pessimism about the health of the U.S. economy as retail sales in Europe beat expectations.

Oil prices hovered above $99 a barrel ahead of an OPEC meeting this week where the cartel may boost production to tamp down crude prices. The dollar weakened against the euro but strengthened against the yen.

European shares were higher in early trading as official figures showed retail sales in the 17 countries using the euro common currency rose by more than anticipated in April despite concerns about the debt crisis.

Eurostat, the EU's statistics office, said Tuesday that retail sales rose by 0.9 percent in April from the previous month, three times what was expected by analysts.

Britain's FTSE 100 rose 0.3 percent to 5,883.06 and Germany's DAX gained 0.8 percent to 7,142.36. France's CAC-40 rose 0.7 percent to 3,888.41.

Wall Street was also set to open higher after four days of losses. Dow Jones industrial futures were 58 points higher to 12,145, while S&P 500 futures rose 7.3 points to 1,292.30.

Asian shares posted scattered gains after a slump on Wall Street on Monday led regional markets to struggle early in the day.

Japan's Nikkei 225 closed up 0.7 percent at 9,442.95 as a weakening yen helped boost the country's powerhouse export sector.

Toyota Motor Corp., the world's No. 1 car maker, jumped 2.2 percent while consumer electronics giants Panasonic Corp. and Sharp Corp. rose 1.1 percent and 1.2 percent respectively.

South Korea's Kospi index slipped 0.7 percent to 2,099.71, with heavy industrials sinking amid fears of a global economic slowdown, including Hyundai Heavy Industries Co., which slumped 2.5 percent.

Minerals and energy shares took a beating on several exchanges. Hong Kong's Hang Seng index lost 0.4 percent to 22,868.67. China Shenhua Energy Co., the state-owned coal miner, lost 1.5 percent in Hong Kong trading.

Australia's S&P/ASX 200 edged down less than 0.1 percent to 4,566.30, with oil and gas producer Woodside Petroleum Ltd. losing 1.2 percent.

In Japan, news reports that Toshiba Corp. and Sony Corp. may cooperate to make themselves more competitive in small and midsize liquid crystal display panels for mobile and tablet devices sent their shares in opposite directions. Toshiba gained 3 percent while Sony slipped 1.5 percent.

Tokyo Electric Power Co., the Japanese utility battling to bring a crippled nuclear power plant under control, rose 4.4 percent. Its shares were battered Monday after TEPCO acknowledged that more action was needed to prevent a massive spill of radioactive water into the environment.

More than 100,000 tons of contaminated water have pooled beneath the plant in northeastern Japan since it was hobbled by an earthquake and tsunami on March 11.

Mainland Chinese shares gained as investors kept on snapping up bargains following recent sell-offs, analysts said.

The benchmark Shanghai Composite Index gained 0.6 percent to 2,744.30, while the Shenzhen Composite Index of China's smaller, second exchange gained 0.7 percent to 1,132.69.

Meanwhile, the U.S. economy's failure to thrive despite two rounds of so called "quantitative easing" by the Federal Reserve -- involving massive injections of cash to keep the economy chugging -- has led to speculation that a third round may be on the way.

"Would it help? Would it hurt? On the first question, our sense is that it won't ultimately prove necessary and that it's certainly too early for Fed officials to be make any hints in that direction," analysts at DBS Bank in Singapore wrote in a report.

On Wall Street on Monday, investors remained focused on last week's grim employment report. The Labor Department reported that employers added only 54,000 new workers in May. The unemployment rate inched up to 9.1 percent from 9 percent.

The Dow Jones industrial average fell 0.5 percent to 12,089.96. The Standard & Poor's 500 index dropped 1.1 percent to 1,286.17. The Nasdaq composite fell 1.1 percent to 2,047.39.

Benchmark crude for July delivery was up 18 cents to $99.18 in electronic trading on the New York Mercantile Exchange. The contract had settled at $99.01 per barrel on the Nymex on Monday.

Analysts are looking for clues on what OPEC will do about oil production when the cartel meets Wednesday in Vienna. OPEC ministers could decide to try to lower oil prices by increasing production. Some OPEC officials have said that they believe oil prices are too high and threaten global economic recovery.

In currencies, the euro rose to $1.4671 from $1.4587 late Friday in New York. The dollar strengthened to 80.23 yen from 80.13 yen.

[Associated Press; By PAMELA SAMPSON]

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