World stocks mixed as growth woes offset earnings

[August 18, 2010]  BEIJING (AP) -- Global markets were mixed Wednesday as stronger earnings from U.S. retailers Wal-Mart Stores Inc. and Home Depot Inc. failed to ease worries about slowing growth in China and elsewhere.

A rise in U.S. industrial output in July help boost some markets but sentiment was guarded amid other evidence the U.S. recovery is stumbling.

Oil prices fell back after a report showed U.S. crude supplies swelled last week, indicating demand for fuel may be weakening.

In early European trading, France's CAC-40 was down 0.2 percent at 3,658.02, Britain's FTSE 100 was off 0.5 percent at 5,323.35 and Germany's DAX was fractionally lower at 6,204.36. Futures pointed to a flat to slightly higher open on Wall Street with Dow futures up 6 points, or 0.1 percent, at 10,364.00.

Japan's benchmark Nikkei 225 stock average gained 78.86 points, or 0.9 percent, to 9,240.54, South Korea's Kospi added 0.4 percent to 1,761.99 and Australia's S&P/ASX 200 was little changed at 4,474.90.

Markets in India, Indonesia, Malaysia, Thailand and New Zealand also gained.

But the Shanghai Composite Index declined 0.2 percent to 2,666.30 and Hong Kong's Hang Seng retreated 0.5 percent to 21,022.73 amid concerns that Beijing's credit curbs are causing growth to slow too rapidly. Benchmarks in Taiwan and Singapore fell.

"There is a sense of an economic slowdown in China and the market is reacting to it belatedly," said Francis Lun, general manager of Fulbright Securities Ltd. in Hong Kong.

Chinese shares gained in previous sessions on hopes that credit curbs would be eased in the wake of weaker economic indicators.

In New York overnight, the Dow Jones industrial average rose 103.84 points, or 1 percent, to 10,405.85, snapping a five-day losing streak on strong U.S. corporate earnings.

Wal-Mart, the world's largest retailer, reported a 3.6 percent rise in second-quarter net income and raised its earnings guidance for the full year on robust demand in China, Brazil and Mexico.

Home Depot, the No. 1 U.S. home-improvement retailer, said its second-quarter net income rose 7 percent.

The Federal Reserve reported U.S. industrial production grew a robust 1.1 percent in July, helped by auto plants that kept operating when they normally shutter for summer renovations. It was a rare piece of positive news from the world's biggest economy, which is struggling to maintain the momentum of recovery amid high unemployment.

In currencies, the dollar fell to 85.27 yen in Tokyo from 85.62 yen in New York late Tuesday. The euro rose to $1.2890 from $1.2876.

Benchmark crude for September delivery was down 53 cents at $75.26 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 53 cents to settle at $75.77 a barrel on Tuesday.

[Associated Press; By JOE McDONALD]

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