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World stocks struggle despite US retail sales gain

Pamela Sampson, AP Business Writer

An investor keeps a memo as he sits in front of the stock price monitor at a private securities company in Shanghai, China, Tuesday, May 14, 2013. Asian stock markets were mixed Tuesday in a lukewarm reaction to data showing that U.S. consumers revved up their retail spending last month. (AP Photo/Eugene Hoshiko)

BANGKOK (AP) -- World stock markets fell Tuesday despite data showing that U.S. consumers were revving up their retail spending last month, as investors made off with profits following recent rallies.

The Commerce Department in Washington said retail sales increased 0.1 percent in April from March, an improvement from March's 0.5 percent decline. Economists had forecast that sales declined by 0.3 percent in April.

The uptick in spending on items such as clothing, cars and electronics is likely to boost the country's growth figures for the current quarter. Still, analysts cautioned that expectations of a drop in retail sales may simply have been too pessimistic.

"April retail sales surprised a bit on the upside," analysts at DBS Bank Ltd. in Singapore said in a market commentary. However, they added that the better-than-expected result still did not portray a picture of health, nor does it "alter the picture of a consumer that remains mired in sub-par spending."

Britain's FTSE 100 fell 0.1 percent to 6,623.50. Germany's DAX shed 0.3 percent to 8,254.54. France's CAC-40 was 0.5 percent down at 3,927.45. Wall Street appeared headed for losses, with Dow Jones futures falling 0.2 percent to 15,029. S&P 500 futures lost 0.2 percent to 1,628.

Asian stocks were mixed. Japan's Nikkei 225 index fell 0.2 percent to close at 14,758.42. South Korea's Kospi added 1 percent to 1,968.83.

Australia's S&P/ASX 200 rose 0.2 percent to 5,221. Hong Kong's Hang Seng shed 0.3 percent at 22,930.28. In mainland China, the Shanghai Composite Index fell 1.1 percent to 2,217.01. The Shenzhen Composite Index fell 1.4 percent 960.81.

Linus Yip, strategist at First Shanghai Securities in Hong Kong, said some markets were being dragged lower by profit-taking following recent rallies. Traders were also eyeing markets with caution amid speculation that better economic data out of the U.S. might lead the Federal Reserve to rethink its super-easy monetary policy.

The Fed has been buying $85 billion a month in bonds to keep long-term borrowing costs down and encourage lending and spending. But some Fed officials are believed to support a reduction in bond purchases if the economy continues to improve.

That could boost the dollar and pull investment funds from Asia to the U.S., Yip said. "There is some talk that maybe there will be some new move by the Federal Reserve."

The state of the world's No. 1 economy should become clearer later this week with the release of industrial production data for April on Wednesday and weekly jobless claims Thursday.

Meanwhile, Germany's ZEW institute will release its monthly investor confidence index for Europe's biggest economy later Tuesday.

Among individual stocks, Panasonic Corp. jumped 5.7 percent a day after the company announced the development of a solar cell lantern that is powered by electricity stored during the day.

Benchmark oil for June delivery was down 9 cents $95.06 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 87 cents to close at $95.17 a barrel on the Nymex on Monday.

In currencies, the euro rose to $1.3018 from $1.2970 late Monday in New York. The dollar fell to 101.36 yen from 101.93 yen.


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