World markets mixed after more grim US housing news despite Chinese rate cutLONDON (AP) -- World stock markets were little changed Tuesday in very light pre-Christmas as early gains were erased by further woeful
U.S. economic data.
The FTSE 100 index of leading British shares closed up 6.82 points, or 0.2 percent, at 4,255.98, but Germany's DAX was 9.64 points, or 0.2 percent, lower at 4,629.38. The CAC-40 in France fell 22.95 points, or 0.7 percent, at 3,128.41.
In the U.S., the Dow Jones industrial average was down 12.59 points, or 0.2 percent, at 8,507.18 while the broader Standard & Poor's index was 1.59 points, or 0.2 percent, lower at 870.40.
Most markets were up earlier in the session but the gains were erased by the news from the Commerce Department that existing U.S. home sales slumped by 8.6 percent in November from the the month before, while new home sales fell by a more modest 2.9 percent but to a 17-year low.
"The November home sales report illustrates the ultimate risk in a situation where negative business cycle momentum persists for an excruciating length of time," said Brian Bethune, chief U.S. financial economist at IHS Global Insight.
Earlier, the Commerce Department confirmed that U.S. gross domestic product, the broadest measure of
economic health, declined at an annual rate of 0.5 percent in the July-September quarter, while corporate profits fell 1.2 percent.
Of more concern to investors is how bad things will likely get in 2009 -- but they are still mostly waiting to see what President-elect Barack Obama does when he enters the White House next month. Most forecasters doubt that the tide of bad news can be turned around quickly and that is likely to prevent share prices from rebounding.
Across the world,
economic growth is sinking fast and in many cases going into reverse.
The British statistics office also revealed Tuesday that the British economy contracted by a bigger than anticipated 0.6 percent in the July-September quarter from the previous three month period. The figure updates the original estimate of 0.5 percent.
Earlier, Asian stock markets fell as an interest rate cut in China disappointed investors and Toyota Motor Corp.'s profit warning from Monday raised concerns about the scale of the global slump.
Investors were unimpressed by 0.27 percentage point cut on the benchmark one-year lending rate to 2.25 percent, its lowest level since February 2004. Many had expected a half-point cut, analysts said. It was the fifth cut in four months as Beijing rushes to revive economic growth.
South Korea's Kospi retreated 35.3 points, or 3 percent ,to 1,144.31, Singapore's benchmark lost 1.2 percent and Australia's key index fell 0.7 percent. Japan's
market was closed for a national holiday.
In China, Hong Kong's Hang Seng Index dropped 2.8 percent to 14,220.79 while Shanghai's main index plummeted 4.6 percent to 1,897.22 as both markets came under pressure after Beijing lowered a key interest rate late Monday.
Japan's market was closed for a public holiday.
Oil prices fell with light, sweet crude for February delivery down $.167 cents to $38.24 a barrel in electronic trading on the New York Mercantile
Exchange.
The dollar rose 0.4 percent to 90.56 yen while the euro was 0.1 percent lower at $1.3921.
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