Investors call an end to week-long rally, cash in

Global stocks slide despite strong US data as investors decide to cash in on week-long rally

Associated Press
Investors wary of buying further into rally
.

View photo

FILE - In this Friday, March 1, 2013 file photo, Trader Edward Schreier works on the floor of the New York Stock Exchange. World stock markets edged off recent highs in uneven trading Tuesday March 12, 2013 as worries grew about China's recovery and Europe's doldrums. (AP Photo/Richard Drew)

LONDON (AP) -- Investors are calling an end to the past week's remarkable rally, with many cashing in on stocks Wednesday despite more strong economic data out of the U.S.

A U.S. government report showed retail sales grew 1.1 percent in January from the previous month, almost twice as much as analysts' forecasts for a 0.6 percent gain. The rise showed consumer spending, which makes up for about three quarters of economic activity in the U.S., was unfazed by tax increases.

But the good news was not enough to encourage investors to keep buying into a stock market that has been rallying steadily for a week, pushing the Dow to break multiple records and many other indexes to multi-year highs.

By midafternoon in Europe, Britain's FTSE 100 was down 0.8 percent at 6,458.95 while Germany's DAX was flat at 7,966.69. France's CAC-40 fell 0.2 percent to 3,833.31.

Wall Street opened lower, with the Dow down 0.2 percent at 14,427.58 after closing higher for eight consecutive days. The broader S&P 500 slipped the same rate to 1,549.98.

Market sentiment had been dented earlier in the day, when official statistics showed that industrial production across the 17-country eurozone fell by 0.4 percent in January, worse than analysts' predictions for an unchanged reading. Both Germany and France, the two industrial powerhouses in the region, registered drops in production, suggesting the sector is contributing to keeping the eurozone in recession.

"January's fall in eurozone industrial production is a timely reminder that, despite the improvement in business and financial market sentiment, the region is likely to have remained in recession in the first quarter," said Ben May, analyst at Capital Economics in London.

That helped push the euro down a sharp 0.7 percent to $1.2942.

Earlier in Asia, Japan's Nikkei 225 index fell 0.6 percent to close at 12,239.66 as the yen stopped dropping and recovered against the dollar, which was down 0.4 percent against the Japanese currency at 95.67.

The yen has been weak against other currencies in recent weeks because of expectations of monetary easing by the Bank of Japan under the leadership of its incoming chief, Haruhiko Kuroda.

Kuroda has been critical of the central bank's policies in the past and is thought to back Prime Minister Shinzo Abe's strategies for seeking to revive Japan's economy by fighting deflation through monetary easing and hefty government spending.

South Korea's Kospi rose 0.2 percent to 1,997.69. Australia's S&P/ASX 200 lost 0.5 percent at 5,092.40.

Hong Kong's Hang Seng shed 1.5 percent to 22,556.65. Stocks in mainland China also fell. The Shanghai Composite Index tumbled 1.4 percent to 2,253.74. The smaller Shenzhen Composite Index lost 1.9 percent at 918.10.

In commodity markets, the benchmark contract for crude oil for April delivery was up 61 cents to $93.15 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 48 cents on Tuesday.

___

Pamela Sampson in Bangkok contributed to this report.

Rates

View Comments