European stocks drift lower ahead of US open.
European stocks drift down ahead of expected subdued US open; Asian stocks up on US jobs data
By Pan Pylas, AP Business Writer
On Monday August 10, 2009, 8:44 am EDT
LONDON (AP) -- European stock markets and Wall Street futures fell modestly Monday as investors took a breather after ending last week on a positive note due to better than anticipated U.S. jobs data.
The FTSE 100 index of leading British shares was down 26.88 points, or 0.6 percent, at 4,704.68 while Germany's DAX fell 50.27 points, or 0.9 percent, at 5,408.23. The CAC-40 in France was 26.58 points, or 0.8 percent, lower at 3,494.56.
A similarly soft opening is expected on Wall Street when it opens shortly. Dow futures were down 7 points, or 0.1 percent, at 9,318 while the broader Standard & Poor's 500 futures fell 1.4 points, or 0.1 percent, to 1,005.
Stocks in Europe and the U.S. ended last week on a sound footing after government figures showed that only 247,000 U.S. jobs were lost in July -- far less than expected -- and the unemployment rate unexpectedly fell to 9.4 percent.
That helped the Dow add 2.2 percent over the week to reach a ten-month high and the S&P to consolidate itself above 1,000. European indexes likewise pushed up to 2009 highs.
With little on the calendar over the rest of Monday and many traders on holiday, stocks could well continue drifting.
However, renewed direction could emerge through the week as the data flow and corporate earnings pick up.
"As the week moves on we will see some more high level economic readings but for now it will be a case of taking stock of what was a pivotal week in the stock market recovery," said Jimmy Yates, a dealer at CMC Markets.
The coming week will likely be dominated by U.S. retail sales data and a raft of earnings from retailers themselves, such as Wal-Mart Stores Inc., JC Penney Corp. and Estee Lauder Co.
Investors are fully aware that without the support of the U.S. consumer, which accounts for around 70 percent of the U.S. economy and 20 percent of the global economy, any recovery will soon fizzle out.
Daragh Maher, an analyst at Calyon Credit Agricole, said retail sales in the U.S. should be boosted by the government-sponsored 'cash for clunkers' subsidy to boost auto sales, though the underlying picture will be considerably less upbeat.
Investors are also awaiting the latest monetary policy decision from the U.S. Federal Reserve on Wednesday.
Though no change in interest rates is expected, investors will be looking to see if the Fed sounds a note of cautious optimism in its accompanying statement and whether it has plans to expand its asset-purchasing program now that the funds are running dry.
Despite the relative dearth of economic news Monday, some stocks were in the spotlight. Notably, bailed-out British bank Lloyds Banking Group PLC slid 4 percent on a newspaper report it was planning a massive issue of shares to loosen the government's grip -- the government owns over 40 percent of the bank after last year's injection of capital to keep it afloat.
In Asia, Tokyo's Nikkei 225 stock average rose 112.17 points, or 1.1 percent, to a ten-month high of 10,524.26 after an unexpected surge in Japanese machinery orders, while Hong Kong's Hang Seng jumped 554.15 points, or 2.7 percent, to 20,929.52, its best finish in about 11 months.
Elsewhere, Australian and Taiwan markets gained while South Korea's market closed little changed.
Shanghai's benchmark edged lower amid continuing jitters that the rush of liquidity that's driven China's economy and markets over the last year might slow.
Meanwhile, oil prices gave up early gains, with benchmark crude for September exchanging hands at $70.81 a barrel, down 12 cents. The contract lost $1.01 on Friday.
The dollar fell 0.6 percent to 97.13 yen, while the euro rose 0.1 percent to $1.4182.
AP Business Writer Jeremiah Marquez in Hong Kong contributed to this report.
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