Stocks recover from weak US data, Greece jitters

AP News
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Posted: May 27, 2011 7:47 AM
Stocks recover from weak US data, Greece jitters

Stock markets mostly rose Friday as a recovery in commodity shares helped investors look past weak U.S. economic data and worries about Greece's debt troubles.

Sentiment has been dented in recent weeks by fears that the U.S. economy, the world's largest, is running out of steam.

The Commerce Department reported Thursday that the economy grew at a tepid annual rate of 1.8 percent in the first quarter, lower than many economists expected. The Labor Department also said more people applied for unemployment benefits last week.

Traders have also been shaken by worries that Greece may not get its next rescue loan installment, with a top EU official reportedly warning that the IMF may hold back on its part of the bailout.

Those jitters hurt the euro and stocks on Thursday, but markets stabilized on Friday, as Greece's top politicians gathered for a cross-party crisis meeting. The political parties are seeking consensus on new austerity measures, as demanded by the EU, to convince investors it can help finance its debt for the next year.

The euro recovered from a sell-off on Thursday, rising to $1.4221 from $1.4140 the day before.

European shares posted solid gains in early trading. Britain's FTSE 100 was 0.8 percent higher at 5,927.07. Germany's DAX rose 0.3 percent to 7,134.78 and France's CAC-40 jumped 0.8 percent to 3,948.97.

Commodities stocks led the gains, with Rio Tinto and Antofagasta up 1.8 percent and 2.4 percent.

Wall Street was headed for a more muted opening after closing higher the day before. Dow futures were flat at 12,402, as were S&P 500 futures at 1,326.

In Asia, most indexes rose, though Japan's Nikkei 225 index drifted down to close 0.4 percent lower at 9,521.94.

Sony Corp. plunged 3.2 percent, a day after reporting a 259.6 billion yen ($3.2 billion) loss for the fiscal year ended March 2011 and its third straight year of losses. Costs of online security breaches around the world and the March 11 earthquake in northeastern Japan battered the electronics and entertainment giant.

Hong Kong's Hang Seng gained 1 percent to 23,118.07. South Korea's Kospi finished 0.4 percent higher at 2,100.24. Australia's S&P/ASX 200 added 0.5 percent to 4,684.

Mainland Chinese shares sank to their lowest level in nearly eight months as investors, succumbing to gloom over the outlook for the latter half of the year, unloaded shares.

The benchmark Shanghai Composite Index lost 1 percent to 2,709.95, its lowest close since Sept. 30 of last year. The Shenzhen Composite Index fell 2 percent to 1,101.11. Shares in coal companies advanced while agricultural-related and textile shares fell sharply.

Benchmark oil for July delivery was up 29 cents to $100.52 per barrel on the New York Mercantile Exchange. The contract settled at $100.23 on the Nymex on Thursday.

The dollar edged up to 81.51 yen from 81.30 yen.

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Pamela Sampson in Bangkok and Fu Ting in Shanghai contributed to this report.