Market momentum falters after record highs

AP News
Posted: Jun 10, 2014 11:55 AM
Market momentum falters after record highs

LONDON (AP) — The positive momentum in stock markets slowed somewhat on Tuesday after major stock indexes in the U.S. and Germany struck record highs.

Optimism over the U.S. economy, coupled with a wide-ranging package of stimulus measures from the European Central Bank have shored up sentiment in the markets in recent days.

"It is hard to escape the feeling of an eerie calm before the onset of a possible storm, and this apprehension certainly goes some way to accounting for some of the caution creeping into the markets," said Michael Hewson, chief market analyst at CMC Markets.

In Europe, Germany's DAX ended the day 0.2 percent higher at 10,028.80, having earlier risen to a fresh high of 10,033. Elsewhere, the CAC-40 in France rose 0.1 percent to 4,595, while the FTSE 100 index of leading British shares was unchanged at 6,873.55.

In the U.S., the Dow Jones industrial average was down 0.1 percent at 16,931 while the broader S&P 500 index fell 0.2 percent to 1,948.36.

Earlier in Asia, the picture was mixed, with Japan's Nikkei 225 closing down 0.9 percent at 14,994.80. Hong Kong's Hang Seng rose 0.9 percent to 23,315.74 and South Korea's Kospi added 1.1 percent to 2,011.80.

Elsewhere, the euro remained under pressure as traders priced in the growing differential between future U.S. and eurozone interest rates — lower interest rates tend to weaken a currency. While the ECB cut interest rates last week, the Federal Reserve has been trimming its stimulus ahead of an expected increase in official borrowing rates next year.

The euro has been drifting lower for much of the last month as expectations grew that the ECB would loosen its monetary policy. The currency was down 0.4 percent at $1.3544.

"The euro currency is finally starting to feel the weight of the might of the ECB," said Andrew Wilkinson, chief market analyst at Interactive Brokers.