Germany's economy minister rejected calls for Greece to get more time to implement reforms
World stocks stall without central bank moves
By Greg Keller on August 27, 2012
PARIS (AP) — Global stock markets stalled Monday as the absence of stimulus action by central banks in the U.S. and China dismayed investors while signs of a weakening economy in Germany showed the increasing impact that the eurozone debt crisis is having.
Stock markets in London were closed for a bank holiday, dampening trading activity.
Markets got a small lift at the open on Wall Street as shares in Apple shot north on news of its $1 billion court win against Samsung.
By afternoon in Europe, France's CAC-40 index was up 0.4 percent at 3,446 and Germay's DAX was up 0.7 percent at 7,022. Wall Street opened on a subdued note — the Dow was down 0.2 percent and the broader S&P 500 was flat.
Investors are growing cautious about the prospect of more economic stimulus from central banks in China and the U.S. and a financial stability plan from the European Central Bank.
The big events that could move the market lie ahead — U.S. Federal Reserve Chairman Ben Bernanke's speech in Wyoming later this week.
In attendance of central bank statements, market sentiment was dented Monday by news that German business optimism, as calculated by the Ifo business survey, fell more than expected in August. "Enterprises are increasingly pessimist about their business development," said Hans-Werner Sinn, the head of the Ifo institute.
Economists have been warning that the debt crisis in the 17-country eurozone could eventually catch up with Germany.
Troubles elsewhere are starting to make themselves felt. Italy and Spain, the No. 3 and No. 4 eurozone economies, are in recessions as they try to reduce budget deficits and struggle to refinance their debts in bond markets.
So far, exports of cars and industrial machinery to stronger economies in Asia and the U.S. have helped Germany grow, while low unemployment has buoyed consumer spending at home. But those advantages may not be enough for much longer against the undertow from the eurozone crisis.
Meanwhile, Germany's economy minister rejected calls for Greece to get more time to implement reforms, saying Athens needs to respect the bailout deal reached with its international creditors.
"What the Greeks have asked for, half a year or two years, that's not doable," Philipp Roesler said in comments to ZDF public television on Sunday.
The question of how to avert a Greek debt default, which could spark a chain reaction among other ailing European economies, has preoccupied EU leaders as they return from their traditional summer break.