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Global stocks mostly higher
AFP - Friday, June 4
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Global stocks mostly higher
LONDON (AFP) - – Global stock markets were mostly higher, posting solid gains after encouraging US economic data helped offset deep concerns that Europe's debt and deficit crisis would sap growth.
Dealers said Asian and European markets did well on the back of Wall Street's 2.25 percent gain on Wednesday but early New York trade on Thursday was muted as investors there consolidated the advance.
They said strong US home and auto sales figures had bolstered hopes the US economy was on track after recent fears that the recovery could be slowing after sharp gains in 2009.
News that the key US service sector grew for the fifth consecutive month in May added to the positive tone on Thursday but then markets came off a bit as investors waited for crucial US new job figures due Friday.
Analysts are forecasting the US economy will show a gain of 500,000 or more jobs in May, up from 290,000 in April.
On Wall Street, the blue-chip Dow Jones Industrial Average opened firmer, adding more than 0.50 percent but then slipped back on mixed data to trade down 0.21 percent at around 1615 GMT. The tech-rich Nasdaq Composite was up 0.31 percent.
US stocks and other markets did well Wednesday after strong pending home and vehicle sales, Charles Schwab & Co. analysts said in a note, "but today's economic data and retailer same-store sales are coming in mixed."
Payrolls firm ADP reported 55,000 jobs were created in the private sector in May for a fourth consecutive month of increases but the figure missed analyst forecasts for 60,000 new jobs.
New jobless claims fell meanwhile but by less-than-expected, suggesting that the labour market remains under pressure.
"Claims are now closer to where they were prior to the mid-May surge and show a labor market that is not healing quickly," said Andrew Gledhill with Moody's Economy.com.
In Europe, several markets were up more than two percent at one stage before falling back on the hesitant Wall Street showing.
In London, the benchmark FTSE 100 index of leading shares closed up 1.16 percent at 5,211.18 points. In Paris, the CAC 40 rose 1.59 percent to 3,557.34 points and in Frankfurt the DAX put on 1.23 percent at 6,054.03 points.
"Investors appear to be welcoming the positive vibe with open arms, hoping that the economic recovery is picking up speed," said analyst Ben Potter at financial spread-betting firm IG Index.
"For the time being an air of opportunism does seem to be washing over the market with equities looking a little on the cheap side," Potter said.
In Asian trade, Tokyo jumped 3.24 percent and Hong Kong gained 1.62 percent as bargain hunters came into the market.
"Market participants were finally able to breathe a sigh of relief on Wednesday," said strategist Joel Kruger at currency trading website DailyFX.
"While the oversold nature of the markets was enough of a reason to want to be buying back into equities, currencies, and commodities, it seems as though a solid round of data out of the US, lack of any additional concerning news out from the eurozone, and subdued geopolitical risk, all helped."
The European single currency fell back sharply, falling to 1.2191 dollars in late Thursday trade from 1.2290 dollars earlier in the day and 1.2245 dollars in New York late Wednesday.
Julian Jessop at Capital Economics said the causes of euro weakness remain in place -- fears the eurozone debt crisis has a long way still to go and that measures to fix the problem will only undercut economic growth.
At the same time, the US outlook appears much stronger than that for Europe, meaning the dollar, apart from its traditional safehaven attributes, appears the better long-term bet.
News that European retail sales fell last month compounded the negative view on the euro.
"Aprils sharp fall in retail sales confirms that consumer retrenchment in the eurozone is not over," said ING economist Martin van Vliet.
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