Stocs muted as Europe gloom offsets Wall St. gains

World stocks muted as worries over Europe recession offset Wall Street gains

Associated Press
World stocks strong into the weekend
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A woman watches an electronic stock board of a securities firm in Tokyo, Thursday, May 16, 2013. Asian stock markets were mixed Thursday following dour European economic data that dampened hopes of a recovery there anytime soon. However, losses were limited by another record session on Wall Street. (AP Photo/Koji Sasahara)

BANGKOK (AP) -- World stock markets were muted Thursday following dour European economic data that dampened hopes of a recovery there anytime soon. Losses were limited by another record session on Wall Street.

The European Union statistics office said Wednesday that nine of the 17 countries that use the euro are in recession, including France. The combined economy of the 17 countries shrank by 0.2 percent in the first three months of 2013 compared to the prior quarter.

Meanwhile, the economy of Germany, whose growth supports lesser economies in the region, expanded by a slight 0.1 percent in the first quarter of the year, undershooting expectations of a 0.3 percent rise.

"The Eurozone has registered six straight quarters of contraction and any recovery is likely to be limited in the months ahead," said analysts at Credit Agricole CIB in Hong Kong in a market commentary.

Britain's FTSE 100 rose 0.1 percent to 6,699.35. Germany's DAX fell 0.1 percent to 8,351.80. France's CAC-40 lost 0.2 percent to 3,973.65. Wall Street was headed for a flat opening. Dow Jones industrial futures were nearly unchanged at 15,236 while S&P 500 futures were marginally lower at 1,653.70.

Earlier in Asia, Hong Kong's Hang Seng rose 0.2 percent to 23,082.68. South Korea's Kospi added 0.8 percent to 1,986.81. Japan's Nikkei lost 0.4 percent to close at 15,037.24. Australia's S&P/ASX 200 shed 0.5 percent to 5,165.70. Benchmarks in Taiwan and Singapore rose while the Philippines and Thailand fell.

Among individual stocks, Virgin Australia Holdings plummeted 17 percent after the airline issued a profit warning after the market closed on Wednesday. Japan's Olympus Corp. surged more than 18 percent after reporting a net profit for fiscal 2012, Kyodo News agency said.

Gains were registered even though U.S. manufacturers cut back on production in April, government data showed Wednesday. The Federal Reserve said factory output dropped 0.4 percent in April, the third decline in four months, as auto companies cranked out fewer cars and factories made fewer consumer goods.

The negative economic news wasn't enough to slow things down on Wall Street, which has been fueled by strong corporate earnings. Both the Dow and the S&P 500 reached all-time highs Wednesday.

Francis Lun, chief economist at GE Oriental Financial Group in Hong Kong, said he thinks the rally will continue until fall, particularly since $85 billion in automatic spending cuts, known as a "sequester," did not derail the U.S. economy, despite predictions that it would.

According to the latest figures, the U.S. economy grew at an annual rate of 2.5 percent in the January-March quarter.

"Everyone was predicting the sequester would be a disaster for the U.S. economy, but it turned out to be a nonevent. The American economy has enough strength to survive the sequester," Lun said.

Benchmark oil for June delivery was down 75 cents to $93.55 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 9 cents to close at $94.30 a barrel on the Nymex on Wednesday.

In currencies, the euro slipped to $1.2871 from $1.2875 late Wednesday in New York. The dollar rose to 102.48 yen from 102.32 yen.

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