Strong Wall Street open boosts European markets - CBS News 8 - San Diego, CA News Station - KFMB Channel 8

Strong Wall Street open boosts European markets

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A securities manager points to a fluctuating stock indicator in Taipei, Taiwan, Wednesday, Aug. 17, 2011. (AP Photo/Wally Santana) A securities manager points to a fluctuating stock indicator in Taipei, Taiwan, Wednesday, Aug. 17, 2011. (AP Photo/Wally Santana)

MILAN (AP) — A strong Wall Street opening boosted European markets Wednesday after they had been bruised by mounting evidence of a slowdown in Europe's economy and disappointment over the latest batch of measures to resolve Europe's spiraling debt crisis.

Strong U.S. corporate earnings helped investors forget their misgivings about Europe's ability to contain its debt problems. Target Corp., Staples Inc. and Dell Inc. all reported earnings for last quarter that were above analysts' forecasts.

The Dow Jones industrial average was up 0.27 percent to 11,437 points. The S&P 500 was 0.35 percent, higher at 1,196.

The U.S. rally helped European stocks recover some ground lost due earlier in the trading day.

In Europe, Germany's DAX closed down 0.77 percent lower at 5,948 while the CAC-40 in France rose a slight 0.73 percent to 3,254. Britain's FTSE 100 of leading British shares was trading down 0.49 percent at 5,331.

Markets, however, remained skeptical that a fix too the crisis was imminent following a Franco-German summit that failed to excite on the heels of weak growth in Germany, Europe's largest economy.

French President Nicolas Sarkozy and German Chancellor Angela Merkel called for greater economic and political unity among the 17 nations that share the euro. But they failed to come up with decisive action that many investors had hoped for, including committing to common eurobonds that would spread the risk for the sovereign debt or strengthening a new bailout fund.

"There was no talk about boosting the EFSF (European Financial Stability Facility) and not talk about eurobonds, all rather disappointing but not altogether surprising, given the political obstacles against them," said Michael Hewson of CMC Markets. "The biggest worry remains the lack of economic growth in Europe."

Compared to last week, when turmoil gripped financial markets in the aftermath of Standard & Poor's downgrade of the U.S.'s credit rating and as Europe's debt crisis threatened Italy and Spain, trading this week has been fairly subdued. Often, trading in the second half of August runs dry up until the U.S. return from the Labor Day weekend in early September.

In the currency markets, the most activity centered on the Swiss franc.

The Swiss franc was back in demand after the Swiss National Bank failed to peg the currency with the euro, as had been widely speculated upon in recent days. Instead, the bank decided to inject more of the Swiss currency into the money markets in its latest attempt to stem the export-sapping appreciation of the currency.

"The market was heavily anticipating something along the lines of a target or a foreign exchange floor, but ultimately the SNB simply expanded their current measures," said Geoffrey Yu, an analyst at UBS.

By noon London time, the euro was trading around 1.2 percent lower on the day at 1.14 Swiss francs, while the dollar was around 1.3 percent lower at 0.789 francs.

Elsewhere, the euro was 0.3 percent firmer at $1.4486 while the dollar fell 0.3 percent to 76.55 yen.

Earlier in Asia, Japan's benchmark Nikkei 225 index sank 0.6 percent to close at 9,057.26 as a strengthening yen dragged down the country's vital export sector.

South Korea's Kospi, which tumbled last week amid massive foreign selling, rose 0.7 percent to 1,892.67.

Mainland Chinese shares edged lower as investors fretted over possible monetary tightening measures and the debt problems among European countries using the euro common currency. The Shanghai Composite Index fell 0.3 percent to 2,601.26 while the Shenzhen Composite Index likewise slipped 0.3 percent to 1,163.87.

Hong Kong's Hang Seng index rose 0.4 percent to 20,289.03, buoyed by Chinese Vice Premier Li Keqiang's pledge to expand the role of Hong Kong as an offshore trading center for China's yuan currency.

Oil prices rose further with the benchmark New York rate up $1.04 at $87.69 a barrel.


Pamela Sampson in Bangkok contributed to this report.

Copyright 2011 The Associated Press.

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