World shares down amid euro debt, Wall Street drop

[May 17, 2011]  BANGKOK (AP) -- Renewed concerns about Europe's debt, falling oil prices and U.S. technology company troubles weighed on world stock markets Tuesday.

Oil prices fell below $97 a barrel, extending a two-week sell-off amid investor concern that slowing U.S. economic growth could undermine demand for crude. The dollar strengthened against the euro and the yen.

In early European trading, Britain's FTSE 100 was 0.2 percent lower to 5,910.19. Germany's DAX dropped 0.8 percent to 7,330.92 and France's CAC-40 was down 0.4 at 3,972.69.

But Wall Street appeared ready to post gains after two days of losses, with Dow Jones industrial futures 20 points higher at 13,529 and S&P 500 futures up 2.6 points to 1,328.20.

Japan's Nikkei 225 closed slightly up at 9,567.02 after a session of drifting in and out of positive territory. Exporters rose on a weakening yen, including Sharp Corp., up 2.1 percent and Sony Corp., up 1.5 percent. Hitachi Ltd. gained 1.3 percent.

Slumping shares included utilities that may have to pitch in with power supplies to help Tokyo Electric Power Co. cope with financial losses following a tsunami on March 11 that destroyed one of the company's nuclear plants. TEPCO has been struggling for two months to bring a radiation leak at a plant in northeastern Japan under control.

Overall damages are expected to be in the tens of billions of dollars (trillions of yen). Kansai Electric Power Co. lost 3.7 percent. Chubu Electric Power Co. Inc., which carried out a government request to shut down a nuclear plant considered vulnerable to tsunamis, dropped 5.5 percent.

TEPCO plummeted 9.5 percent, as investors dumped shares after Moody's Investors Service on Monday cut its credit rating on the troubled utility company to one notch just above junk status.

Stocks of late have become less appealing to many investors, given the dearth of good economic news. Sean Darby, chief Asian strategist at Nomura in Hong Kong, said traders are waiting for stock prices to bottom.

"I think people are really waiting for markets to fall back," Darby said. "We've had a very good run over the last quarter."

Hong Kong's Hang Seng index was 0.3 percent lower to 22,901.08. Australia's S&P/ASX 200 gained 0.7 percent to 4,683.90.

South Korea's Kospi index lost 0.1 percent to 2,102.41, with high-tech shares following their U.S. counterparts down. Hynix Semiconductor Inc. dropped 3.8 percent and rival LG Electronics slipped 0.9 percent. In the U.S., technology companies were among the largest losers on Monday, with Yahoo! Inc. and Amazon.com Inc. falling by more than 4 percent.

The Shanghai Composite Index rose 0.1 percent to 2,852.77. The smaller Shenzhen Composite Index lost 0.1 percent to 1,197.04. Shares in coal companies and banks led the gains while the chemical stocks weakened.

Shanxi Guoyang New Energy Co. Ltd. hit the daily limit of 10 percent.

In New York on Monday, technology company troubles and renewed concerns about Europe's debt dragged stocks lower, the day that European finance ministers approved $110 billion in rescue loans to Portugal. They have yet to decide on a second rescue package for Greece.

The arrest of the head of the International Monetary Fund is expected to make solving Greece's problems more difficult. The official, Dominique Strauss-Kahn of France, had been heavily involved in trying to fix the debt crises in Portugal and Greece. He is being held without bail on charges of sexually assaulting a hotel employee in New York City.

The Dow Jones industrial average lost 0.4 percent to close at 12,548.37. The Standard & Poor's 500 index fell 0.6 percent to 1,329.47. The Nasdaq fell 1.6 percent to 2,782.31.

Investors were awaiting some important economic reports in Washington on Tuesday, including the release of housing starts and industrial production for April, to gauge the health of the U.S. economy.

Benchmark crude for June delivery was down 50 cents to $96.87 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $2.28 to settle at $97.37 on Monday.

In currencies, the euro weakened to $1.4145 from $1.4192 Monday afternoon in New York. The dollar gained to 81.63 yen from 80.84 yen.

[Associated Press; By PAMELA SAMPSON]

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