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European stocks dip with US set to open lower

 A TV reporter reports in front of an electronic stock indicator in Tokyo, Japan, Wednesday, Aug. 26, 2009 as Japan's Nikkei 225 stock average rose 14...
 A man watches an electronic stock indicator in Tokyo, Japan, Wednesday, Aug. 26, 2009. Asian stocks posted modest gains Wednesday, lifted by rising U...

Japan Markets

A TV reporter reports in front of an electronic stock indicator in Tokyo, Japan, Wednesday, Aug. 26, 2009 as Japan's Nikkei 225 stock average rose 14...

Japan Markets

A man watches an electronic stock indicator in Tokyo, Japan, Wednesday, Aug. 26, 2009. Asian stocks posted modest gains Wednesday, lifted by rising U...

European stocks slipped Wednesday and Wall Street was also expected to open lower as upbeat German and U.S. economic data were not enough to convince investors that any global recovery could last beyond the short term.
Germany's DAX was down 34.53 points, or 0.6 percent at 5,522.56, while Britain's FTSE 100 eased 26.28 points, or 0.5 percent, to 4,890.52. France's CAC-40 edged down 12.65 points, or 0.3 percent, to 3,667.96.
Wall Street futures predicted losses on the open. Dow Jones industrial average futures fell 24 points, or 0.3 percent, to 9,499.00, while Standard & Poor's 500 futures declined 3.30, or 0.3 percent, to 1,022.80.
Asian markets had risen earlier, catching up with Tuesday's world gains after the release of U.S. data showing an increase in American house prices and consumer confidence.
Analysts said investors nevertheless remain cautious about the global economic outlook and have yet to be convinced that a strong recovery is underway.
U.S. data for durable goods orders for July will be watched closely on Wednesday as an indicator of American consumer spending _ which accounts for a massive 70 percent of the U.S. economy and 20 percent of the global economy. Economists polled by Thomson Reuters predict they rose 3 percent, helped by the government's Cash for Clunkers program to boost the auto sector. New home sales data is also due.
Still, experts believe stock markets are unlikely to rise much further as long as the longer-term outlook for the global economy is burdened by rising unemployment and lingering uncertainties in credit markets.
"Although the news is likely to continue to drum the beat of recovery, the market is increasingly discounting such news," said Mitul Kotecha at Calyon.
The market "is likely to need somewhat clearer signs of what shape recovery will take before equities and risk appetite can rally much further," he said.
In fact, German stocks fell despite data showing the country's business confidence rose for a fifth consecutive month in August. The index in the closely watched Ifo survey, released Wednesday, rose to 90.5 points from 87.4 points in July, about as expected and confirming Europe's largest economy is on the mend.
"The index is now back to its pre-Lehman level," said Frederik Ducrozet, economist at Credit Agricole in Paris, referring to the collapse of the U.S. investment bank last September.
He said confidence "is likely to continue to rise in the coming months" as improvements look more solid and broad-based than earlier this year.
Still, the data gave little support to stock markets, "maybe because the market is slowly becoming 'used' to good European data," Ducrozet said.
He noted that central banks have warned that recovery will not be a smooth ride, particularly since unemployment is expected to continue to rise, making investors hesitant to buy too much into rallies.
In China, traders held similar doubts. Beijing is in the midst of a two-year, 4 trillion yuan ($586 billion) effort to boost domestic consumption by pumping money into the economy. Economic growth accelerated to 7.9 percent in the latest quarter, but weak corporate profits and other areas suggest that a recovery is not firmly established.
Hong Kong's Hang Seng Index rose 0.1 percent to 20,456.32 while the Shanghai Composite Index jumped 1.8 percent to 2,967.59, making up for sharp losses the previous day.
Japan's Nikkei 225 index climbed 1.4 percent to 10,639.71. Shares of Toyota Motor Corp. advanced 1.5 percent after the world's biggest automaker announced its latest production cuts, spurring investor hopes for better efficiency and profits.
Benchmarks in South Korea, Singapore, Australia and New Zealand also rose. Taiwan was the region's only major decliner, falling 1.3 percent.
Crude oil prices rose in European electronic trade, with benchmark crude for October delivery up 25 cents at $72.30. The contract fell 3 percent overnight.
The dollar slipped to 93.95 yen from 94.19 yen while the euro rose to $1.4315 from $1.4301.
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Associated Press writer Tomoko A. Hosaka in Tokyo contributed to this report.


Updated : 2021-05-14 23:36 GMT+08:00