European stocks rally despite Wall Street swings
LONDON -- European stocks closed higher Thursday after a moderately reassuring update from Nokia Corp., the world's biggest mobile phone maker, but U.S. stocks shifted between gains and losses amid mixed economic and corporate news.
In Europe, the FTSE 100 index of leading British shares closed 84.58 points, or 2.1 percent, higher at 4,052.98 while Germany's DAX rose 59.67 points, or 1.3 percent, to 4,609.46. The CAC-40 in France was up 52.44 points, or 1.8 percent, at 3,038.18.
Investors in Europe were buoyed by the announcement from Nokia that it was not altering its outlook for its key mobile device unit, which reinforced hopes that the worst of the economic downturn may have passed. However, investors weren't getting too carried away as Nokia did report a 90 percent slide in first quarter profit.
On Wall Street, the Dow Jones industrial average edged up 3.82 or 0.05 percent, to 8,033.44, while the broader Standard & Poor's 500 index rose 3.11 point, or 0.4 percent, to 855.17
U.S. stocks oscillated between gains and losses through the session.
On the positive side, investors were pleased to see that JP Morgan Chase & Co. became the latest bank to report better than anticipated earnings, which added to the weight of evidence suggesting that the U.S. banking sector may be stabilizing. In recent days Wells Fargo & Co. and Goldman Sachs Group Inc. also reported profits above analysts' forecasts.
In addition, there was some encouraging news on the jobs front in the U.S., after the Labor Department said new jobless claims fell to 610,000 last week from the previous week's upwardly revised 663,000.
Though Howard Wheeldon, senior strategist at BGC Partners, said this was "no time for euphoria" he said the downward trend on claims could be "hugely important for market sentiment" over the coming weeks.
"Markets will no doubt take the news as another positive step but with the pattern of economic data remaining mixed and still biased toward the downside it would be too early to suggest that equity market reaction will be suggestive of anything other than continuation of this bear market rally," said Wheeldon.
Offsetting that modest optimism was the news that the U.S.'s second biggest mall operator, General Growth Properties Inc., filed for Chapter 11 bankruptcy protection after being unable to persuade debtholders to give it more time to refinance its debt.
There were also some concerns that JP Morgan failed to give any indication as to when it planned to pay back the $25 billion it got from the government through the Troubled Asset Relief Program.
Earlier, markets in Europe and Asia had been subdued as relief over China's economic growth was offset by weaker U.S. economic statistics from earlier this week.
While China said its annual growth slowed to 6.1 percent in the first quarter from 6.8 percent in the previous quarter, there had been some fears that the downturn would have been more severe.
Though the world's third largest economy continues to be a key driver for the global economy, some recent optimism surrounding the largest economy, the U.S., appears to have dissipated amid some downbeat economic news. Recent figures have shown that U.S. retail sales and industrial production remain under pressure.
Hopes that an improvement in the global economy may emerge soon had enticed some investors back into stock markets in recent weeks. The rise in risk appetite has gained momentum over the last month or so as global equities have rallied from multiyear lows to post their biggest gains in such a short space of time since 1933.
That improved sentiment appears to have dried up this week following the Easter holiday.
"In the shorter term, it wouldn't be surprising to see the market carry on the recent pattern of 'up one day, down the next' with little significant change in either direction," said David Jones, chief market strategist at IG Index.
In Asia earlier, most markets gyrated throughout the day after initially trading higher on Wall Street's strong finish following a moderately encouraging economic assessment from the U.S. Federal Reserve.
In Japan, the Nikkei 225 stock average was up almost 3 percent before turning down and rising again to close up 12.30 points, or 0.1 percent, at 8,755.26. In Hong Kong, the Hang Seng finished down 86.63 points, or 0.6 percent, at 15,582.99.
In mainland China, the Shanghai index edged down 1.92, or 0.1 percent, to 2, 534.13. Elsewhere, South Korea's Kospi added 0.3 percent and Australia's main index rose 0.7 percent. Benchmarks in India and Singapore fell.
Oil prices continued to hover around the $50 a barrel mark, with benchmark crude for May delivery up 30 cents at $49.55 in electronic trading on the New York Mercantile Exchange.
In currencies, the yen slipped slightly to 99.32 from 99.35. The euro rose to $1.32 from $1.3155.