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US stocks decline after weak data | |
(about 1 hour later) | |
US stocks fell in Tuesday trading, after weak consumer confidence data reignited concerns about the health of the US economy. | |
The main Dow Jones index fell 0.6%, after the closely watched Conference Board report indicated US consumer morale was at a five-year low. | |
Wall Street had rallied on Monday on news that JP Morgan Chase had raised its takeover offer for Bear Stearns. | |
European shares trimmed earlier gains but remained in positive territory. | |
The benchmark Dow Jones industrial average fell 72.21 points to 12,476.43 points, while the tech-dominated Nasdaq index shed 0.2%, or 4.33 points, to 2322.42. | |
The UK's FTSE 100 was up 138.5 points, or 2.5%, at 5,677, Germany's Dax was 2.76% higher and France's Cac rose 2.58%. | |
'Ready for a rebound' | 'Ready for a rebound' |
JP Morgan's higher offer for troubled Bear Stearns has eased fears about the extent of woes in the banking sector. | JP Morgan's higher offer for troubled Bear Stearns has eased fears about the extent of woes in the banking sector. |
But analysts were divided on whether Tuesday's gains in Europe and Asia were likely to continue. | |
"I think this is the beginning of a rally," said Francis Lun, a general manager at Fulbright Securities in Hong Kong. | "I think this is the beginning of a rally," said Francis Lun, a general manager at Fulbright Securities in Hong Kong. |
"We have gone down low enough and the market is ready for a rebound. Banks will lead the rally." | "We have gone down low enough and the market is ready for a rebound. Banks will lead the rally." |
But Societe Generale's Arthur van Slooten said the gains may only "be a temporary relief". | But Societe Generale's Arthur van Slooten said the gains may only "be a temporary relief". |
"To be convinced that this is the floor, we need more indications that the credit market is stabilising," he said. | "To be convinced that this is the floor, we need more indications that the credit market is stabilising," he said. |
"Until that happens, equities will remain under pressure, so this could be a small rally in a bear market." | "Until that happens, equities will remain under pressure, so this could be a small rally in a bear market." |
In Asian trade on Tuesday, Japan's Nikkei closed up 2% while Hong Kong's Hang Seng rose 6.4%. | |
In Australia the main share index added 3.3%, while in India the Bombay Sensex gained 928.09 points, or 6.1%, to end at 16,217.49. |