GLOBAL MARKETS: European Stocks Steady, US Futures Rise

By Michele Maatouk
Of DOW JONES NEWSWIRES


LONDON (Dow Jones)--European stocks were steady Tuesday despite continuing concerns about sovereign debt and weakness in U.S. stocks, which closed at a three-month low.

"The problems with Greece and the potential for these to spread to other European countries still exist," said David Morrison, strategist at GFT, adding that the weekend's G7 meeting did little to alleviate fears.

Losses were limited, however, as gains in the basic-resources sector and firmer U.S. stock futures provided support. Basic resources stocks were boosted by higher metals prices: Xstrata added 2.6%, while ArcelorMittal rose 1.3%. The DJ Stoxx 600 basic-resources index was up 1.0% at 462.33.

"There is no dominant theme to this morning's session, so traders are taking a lead from U.S. futures, which are pointing to a firmer open this afternoon," said David Morrison, market analyst at GFT. "Traders in Europe are trying to adjust to Monday's selloff on Wall Street, which has been almost completely reversed this morning," he added.

By 0905 GMT, the pan-European Dow Jones Stoxx 600 index was down 0.1% at 238.77 but London's FTSE 100 was 0.3% higher at 5108.14. Frankfurt's DAX was up 0.2% at 5495.16 but Paris's CAC-40 was down 0.1% at 3604.87.

Among the smaller markets in focus, Greece's ASE index was up 1.1% at 1826.11, Spain's Ibex 35 index was up 0.2% at 10,229.10 and Portugal's PSI-20 index was up 0.1% at 7443.78.

In the futures markets, the March Dow Jones Industrial Average contract was up 0.6% while the Standard & Poor's 500 and the Nasdaq 100 contracts were each up 0.8%.

On the economic calendar, the only figures of note are the U.K. trade balance at 0930 GMT and U.S. wholesale inventories at 1500 GMT.

On Wall Street, stocks fell Monday, led by financials such as Bank of America, Wells Fargo and J.P. Morgan Chase, as worries over increasing regulation and the impact of Europe's sovereign debt worries continued to weigh. Investors voiced concern over how big banks could be affected by the Obama administration's plans to restrict banks' size and the risks they can take on.

The Dow Jones Industrial Average fell 103.84 points, or 1.0%, to 9908.39. The measure is now off 1.6% for the month and is down 5% for the year. The technology-heavy Nasdaq Composite index fell 15.07, or 0.7%, to 2126.05. The Standard & Poor's 500 index declined 9.45, or 0.9%, to 1056.74, led by its financial sector.

Jitters over sovereign debt in European countries such as Greece and Portugal also took their toll Monday, with investors disappointed that the Group of Seven finance ministers, who met over the weekend in Canada, failed to say anything new on the matter. European officials again suggested that a bailout isn't on the European Union's agenda.

In Asia, shares were mostly higher Tuesday, recovering from earlier losses. But a cautious tone remained, with traders saying worries about sovereign debt are denting demand and hurting risk appetite.

Nevertheless, some were of the view that investors now seemed less worried that Europe's problems will hurt the global economy. "While Europe's debt woes are still simmering away in the background, it seems that investors are less fearful the swelling deficits will prove problematic for the global economy," said Danica Hampton, currency strategist at the Bank of New Zealand.

Japan's Nikkei 225 was down 0.2% but Hong Kong's Hang Seng index rose 1.0% and the Shanghai Composite was 0.5% higher.

Japanese stocks were pushed down by weakness in some exporters, although foreigners' buying in companies which recently reported strong earnings limited the losses.

In the European foreign exchanges, the euro and the pound gained against the dollar and the yen. At 0915 GMT, the euro was quoted at $1.3730, up from $1.3649 in late New York trade Monday, while the dollar was higher at Y89.70, up from Y89.26. Sterling was trading at $1.5598, up from $1.5584.

Elsewhere, spot gold was at $1069.10 per troy ounce, up $6.25 from the New York close in response to the weaker dollar. Nymex March crude oil futures were up 44 cents at $72.33 per barrel. And the March Dow Jones UBS Commodity Index was quoted at 128.60, up 0.60.

The European government bond markets were lower, with the March bund future down 0.09 at 123.82.



-By Michele Maatouk, Dow Jones Newswires; +44-20-7842-9447; michele.maatouk@dowjones.com


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source: http://online.wsj.com/article/BT-CO-20100209-703956.html?mod=WSJ_World_MIDDLEHeadlinesEurope