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European markets higher on expected Dow bounce
AP Business Writer
LONDON — European stocks rose modestly Tuesday as hopes of a rebound on Wall Street — following the previous day's savage retreat — helped offset an overnight slump in Asian markets.
The FTSE 100 index of leading British shares was up 32.76 points, or 0.8 percent, at 4,098.25, helped by a 12 percent rise in the share price of British Airways PLC, which said it is in merger talks with Australian rival Qantas.
Japanese men make their way past an electric market board in central Tokyo, Tuesday, Dec. 2, 2008. Japan's Nikkei stock index tumbled more than 5 percent in early trade Tuesday following massive losses on Wall Street amid growing gloom over the global economy. (AP Photo/Katsumi Kasahara)
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Meanwhile, the CAC-40 index in France was 25.11 points, or 0.8 percent, higher at 3,105.54. Germany's DAX was the best performing European index, up 74.09 points, or 1.7 percent, at 4,468.88, as car companies like Daimler AG and Volkswagen AG recouped most of the previous session's losses.
Earlier, Asian markets slid with Japan's Nikkei 225 stock average tumbled 533.53 points, or 6.4 percent, to 7,863.69, and Hong Kong's Hang Seng index lost5 percent to 13,405.85.
The heavy losses in Asia followed near 5 percent declines in Europe on Monday and the near 700 point, or 7.7 percent, slide in the Dow Jones index of leading U.S. shares, which wiped out more than half of last week's gains.
However, Wall Street was expected to open higher following a now-familiar pattern of snapping back after a huge selloff. Dow Jones industrial average futures rose 130, or 1.6 percent, to 8,269, while Standard & Poor's 500 index futures rose 15.10, or 1.9 percent, to 830.90,
European and U.S. markets sold off heavily Monday, followed Tuesday in Asia, after a run of bad data across the world, increasing fears that the length and depth of the global economic downturn will be bigger than anticipated.
It all culminated with Monday's announcement by the National Bureau of Economic Research, considered the arbiter of the U.S. economic cycle, that the world's largest economy entered a recession in December 2007, much earlier than most predictions.
"If the U.S. economy is entering a depression, it is far too soon, even for an equity market that tries to discount conditions six months or a year ahead, to be looking for economic recovery," said Stephen Lewis, chief economist at Monument Securities.
The optimism which saw U.S. stocks rise for five straight days last week for the first time since July 2007, has all but evaporated amid renewed worries about the global economy. The data expected out of the U.S. over the rest of the week, culminating in Friday's closely-watched jobs report for November, is expected to make for further grim reading.
Despite the recession which has taken hold across the developed world, some companies are managing to post solid performances. One notable example was British supermarkets chain Tesco PLC Tuesday, which saw its share price rise around 9 percent after it reported like-for-like sales excluding revenues from its gas pumps up 2 percent during the third quarter; including gas the total was up 3.2 percent.
"Yet again Tesco has defied the laws of gravity kicking market recession fears firmly in the teeth," said Howard Wheeldon, senior strategist at BGC Partners.
Tesco will be hoping that the widely-anticipated 1 percentage point rate reduction Thursday from the Bank of England will help entice shoppers in the crucial Christmas trading period ahead. The European Central Bank is also expected to cut its benchmark rate by at least half a percentage point on Thursday.
Earlier, Australia's central bank slashed its key interest rate Monday a full percentage point to 4.25 percent in an attempt to prevent the economy from sliding into recession. But investors took scant comfort from the move, sending the benchmark S&P/ASX 200 index down 4.2 percent to 3,528.2.
Benchmarks in the Philippines, Taiwan, India and South Korea also dropped sharply.
Markets on mainland China were mixed, with food processors up following a lifting of price controls but banks down on economic jitters. The benchmark Shanghai Composite Index slipped 0.3 percent, while the Shenzhen Composite Index rose 1.4 percent.
The bleak outlook for the world economy drove oil prices to three-year lows earlier below $48 a barrel. By early afternoon light, sweet crude for January delivery was down only $0.06 to $48.76 a barrel.
The dollar was 0.3 percent higher at 93.36 yen, while the euro was 0.6 percent stronger at $1.2695. The pound meanwhile, which slumped around 3.5 percent against the dollar Monday after dismal British manufacturing data, was up 0.7 percent at $1.4989.
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Associated Press Writer Tomoko A. Hosaka in Tokyo contributed to this report.
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Copyright 2008, The Associated Press. The information contained in the AP Online news report may not be published, broadcast or redistributed without the prior written authority of The Associated Press.Have fun
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Today is St. Bibiana's Day. Don't know who she is? You probably just forgot because St. Bibiana is a the patron saint of drunks and hangovers. What better way to honor her than by heading to the bars? Bars and clubs guide »
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Here's where you get to tell the world what you think. Every week you get to vote on the best that the Dayton area has to offer in entertainment, restaurants, recreation & and a few other bizarro categories.
Voting in this category ends on Dec. 8.
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There's never a shortage of holiday events in the area to occupy your time until the New Year rings itself in. This year, all the usual suspects are present — Woodland Lights, RiverScape ice skating, Lebanon's Carriage Parade — with a couple of brand new additions to the mix, including 50 Under $50, a collaborative collection of area artists, getting together for a Friday/Saturday shopping and entertainment experience at 20 N. Jefferson St. downtown this weekend, the same place the recent Dayton LadyFest made its mark; Sandstorm Middle-Eastern Dance Company's Ho Ho Hafla — a holiday show like no other; and a pub crawl for a good cause. More »
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A big action adventure with big, big stars Nicole Kidman and "Sexiest Man Alive" Hugh Jackman. Set in Australia (duh) on the brink of World War II, the plot follows English aristocrat Kidman and cattledriver Jackman as they fight to save the land she inherited. More »
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