Solid US opening gives European markets a lift

Perky US opening gives European markets a lift as investors ponder outlook after strong run

Associated Press
Asia stocks down on bleak UK factory production
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A woman chats with her fellow investor at a private securities company Tuesday, March 12, 2013 in Shanghai, China. Asian stock markets dropped Tuesday, dragged down by new worries about China's recovery and Europe's doldrums. (AP Photo)

LONDON (AP) -- A perky start to trading on Wall Street helped European markets eke out gains Tuesday, though a dearth of scheduled economic news has kept many investors on the sidelines.

With the Dow Jones index recording a series of all-time highs and many of the world's major stock indexes at multi-year highs, too, investors are mulling whether the recent rally can make another push higher.

"Nobody wants to get off the gravy train too soon, but on the other hand no one wants to commit to buying a season ticket," said David Madden, market analyst at IG.

In Europe, the FTSE 100 index of leading British shares was up 0.4 percent at 6,529 while Germany's DAX rose 0.1 percent to 7,992. The CAC-40 in France was 0.4 percent higher at 3,853.

In the U.S., stocks mostly advanced even though futures markets had been predicting modest losses. The Dow Jones industrial average was up 0.2 percent at 14,475 and on course for another record close, while the broader S&P 500 index was flat at 1,556.

For much of the past month, the Dow has been the focus as it tried to breach its previous high. Now, attention is turning to the S&P as it too heads for a record peak.

"Although the S&P is within a whisker of fresh all-time highs, history has shown us that in both 2000 and 2007 when it's been around this level, it's been the tipping point for a considerable sell-off," said Fawad Razaqzada, market strategist at GFT Markets. "Whether 2013 can be any different remains to be seen."

The recovery in the stock market mood was evident elsewhere as supposedly riskier assets recovered, too. The euro was up 0.2 percent at $1.3063 while the price of benchmark New York crude rose $1.30 to $93.36 a barrel.

Two currencies were having a particularly volatile day.

The British pound fell as far as $1.4830, its lowest level since June 2010, after weak British industrial production figures raised fears that Europe's third-largest economy was heading for its third recession in a little more than four years. The pound has since settled around the $1.4875 mark.

The Japanese yen was also a focal point once again, as it recovered some of its recent losses. The dollar was 0.3 percent lower at $96.24 yen. The yen earlier fell to a three and a half year low against the dollar on mounting expectations that the Bank of Japan will soon announce a big stimulus program to get the moribund Japanese economy going again.

The reverse in the yen had an impact on the country's main stock index, the Nikkei 225. It did an about-face after spurting higher in the morning. After hitting 12,461.97, an intraday high not seen in more than four years, the benchmark dropped 0.3 percent to close at 12,314.81. That finish put an end to an eight-day winning streak.

The index's moves have hinged on the fortunes of the yen. A lower currency potentially makes the country's exports more competitive in international markets.

Elsewhere in Asia, Hong Kong's Hang Seng fell 0.9 percent to 22,890.60. Australia's S&P/ASX dropped 0.6 percent to 5,117.90. South Korea's Kospi shed 0.5 percent to 1,993.34.

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