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Stocks hit by euro jobless rise, Fed uncertainty

David Mchugh, AP Business Writer

People walk past an electric stock board of a securities firm in Tokyo, Friday, May 31, 2013. Japan's Nikkei 225 finished up 185.51 points, or 1.37 percent, from the previous day at 13,774.54 as Asian stock markets were choppy Friday after lackluster U.S. economic reports raised expectations that the U.S. Federal Reserve would stick to its aggressive stimulus policies. (AP Photo/Shuji Kajiyama)

FRANKFURT, Germany (AP) -- Uncertainty over how long the U.S. Federal Reserve will continue with its stimulus policies and more grim European jobs news weighed on markets Friday. European stocks fell while U.S. shares were little changed.

Official figures released Friday showed that unemployment across the 17 European Union countries that use the euro rose to 12.2 percent in April. That's the highest level since the shared currency was introduced in 1999 and up from the previous record of 12.1 percent the month before.

"On the whole this portrays a region which continues to worsen and is unlikely to improve anytime soon," said Craig Erlam, market analyst at Alpari.

Following the figures, Germany's DAX was down 0.3 percent at 8,375.78 while France's CAC-40 declined 0.5 percent to 3,974.63. Britain's FTSE 100 fell 0.6 percent to 6,619.82

Wall Street opened lower but recovered somewhat on the back of stronger consumer sentiment data. The Dow Jones industrial average traded flat in midday trading in New York, down a bare 0.02 percent at 15320.73, while the broader Standard & Poor's 500 was down 0.1 percent at 1651.86.

Over the past couple of weeks markets have been volatile in response to the vagaries of the U.S. economic data. Investors are closely monitoring the data to decide how likely the Fed is to reduce its government bond purchases, which are designed to support the U.S. economy.

On Friday, consumer confidence surged in April to a five-year high, according to the Conference Board, as Americans' outlook on the job market improved.

Home prices have surged 11 percent over the past year. Rising home tend to make homeowners feel wealthier and more likely to shop. Some economists estimate that for every dollar increase in home values, consumer spending can rise as much as 10 cents.

Earlier in Asia, Japan's Nikkei 225 closed 1.4 percent higher at 13,774.54, bouncing back after a dizzying drop of more than 5 percent the previous day. South Korea's Kospi advanced 0.1 percent to 2,001.05. Hong Kong's Hang Seng fell 0.4 percent to 22,392.16.

Traders around the world are also keeping an eye on China. Its official manufacturing index for May is to be released on Saturday. A similar survey by HSBC Corp. issued last Thursday showed China's manufacturing contracted to a seven-month low of 49.6 from April's 50.4 on a 100-point index. Numbers below 50 show a contraction.

Andrew Sullivan of Kim Eng Securities in Hong Kong said traders were keeping their expectations in check for China, since as a huge exporter it is sensitive to global economic weakness.

"As long as it's not far off the 50 mark, I don't think people will be too worried," Sullivan said of the China manufacturing index.

The dollar rose 0.4 percent to 101.10 yen, and against the euro, which fell 0.8 percent to $1.2949.

Oil prices fell, with the New York benchmark down 88 cents to $92.73 per barrel.