World stocks pause after Dow hits 2009 high

World stock markets pause for breath after Dow strikes new 2009 high

• By Pan Pylas, AP Business Writer
• On 11:40 am EST, Tuesday November 10, 2009

LONDON (AP) -- European and U.S. stock markets took a breather Tuesday after a big rally the previous day pushed the Dow Jones industrial average to its highest level this year.

Analysts said it was unsurprising trading was subdued after Monday's big gains, when sentiment was buoyed by the weekend pledge from the Group of 20 rich and developing countries to maintain stimulus measures as long as economies remained weak.

In Europe, the FTSE 100 index of leading British shares closed down 4.63 points, or 0.1 percent, at 5,230.55 while Germany's DAX fell 6.52 points, or 0.1 percent, at 5,613.20. The CAC-40 in France ended a minuscule 0.1 point higher at 3,785.59.

On Wall Street, the Dow was down 4.99 points, or 0.1 percent, at 10,221.95 around midday New York time while the broader Standard & Poor's 500 index fell 2.92 points, or 0.3 percent, to 1,090.16.

On Monday, U.S. stocks closed around 2 percent higher in the wake of the G-20 statement, with the Dow closing at 10,226.94, its best finish this year.

David Jones, chief market strategist at IG Index, said there may be an "element of twitchiness creeping back into the market" as many of the world's major indexes approach their highest levels of the year.

Though the Dow pushed out to fresh highs for 2009, Jones noted that the FTSE 100 and the S&P 500, for example, are still trading just below their October highs.

"It would not be surprising to see markets mark time ahead of here, or even for some to book profits following the strong rise seen so far this month," said Jones.

Much could well depend on whether the S&P 500 -- widely considered to be a better barometer of investor appetite than the Dow -- can breach its October high of 1,097.

As a result, investors will be looking at earnings reports from a host of U.S. retailers this week. Wal-Mart Stores Inc., Abercrombie & Fitch Co., Macy's Inc. and JC Penney Inc. all report third quarter earnings. Without the help of the consumer, which accounts for around for 70 percent of the U.S. economy, any global economic recovery will be modest.

"The key 'black spots' for the U.S. economy remain the labor market and ongoing consumer de-leveraging," said Neil Mackinnon, global macro strategist at VTB Capital in London.

Earlier in Asia, Japan's Nikkei stock average added 61.74 points, or 0.6 percent, to close at 9,870.73, and Hong Kong's Hang Seng edged up 0.3 percent to 22,268.16.

Elsewhere, South Korea's markets gained 0.4 percent to 1,582.30. Shares were also higher in mainland China, Australia, Taiwan and the Philippines.

While stocks found support from the G-20 statement, the dollar has suffered. On Monday, the euro rose above $1.50 for the first time this month, with many analysts now predicting a march back to last year's all-time high of $1.6038.

By late afternoon London time, the euro was down 0.3 percent at $1.4955 while the dollar fell 0.1 percent to 89.84 yen.

Oil prices remained below the $80 a barrel mark, with benchmark crude for December delivery down 4 cents at $79.39. The contract rose $2 on Monday in tandem with the big stock market gains.

AP Business Writer Yuri Kageyama in Tokyo contributed to this report.

Buzz up!