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US stocks decline after weak data US stocks mixed after weak data
(about 5 hours later)
US stocks fell in Tuesday trading, after weak consumer confidence data reignited concerns about the health of the US economy. US stocks had a mixed session on Tuesday with strong metal and oil stocks helping compensate for a weak report on the economy.
The main Dow Jones index fell 0.3%, after the closely watched Conference Board report indicated US consumer morale was at a five-year low. The main Dow Jones index fell 0.1%, the broader S&P 500 edged higher, and the Nasdaq Composite index rose 0.6%.
Wall Street had rallied on Monday on news that JP Morgan Chase had raised its takeover offer for Bear Stearns. Stocks fell after a key measure of US consumer confidence showed a sharp fall in March, raising economic worries
But metal and mining shares were helped by the weaker dollar, Alcoa added 2% and Devon Energy added 3.8%.
"The catalyst for commodities is the weaker dollar and it's allowing other groups to rally," said Steve Goldman, market strategist at Weeden & Co.
"Global growth, at least from a commodities standpoint, will probably stay intact," he added.
European shares briefly trimmed earlier gains but stayed in positive territory.European shares briefly trimmed earlier gains but stayed in positive territory.
The benchmark Dow Jones industrial average fell 36.96 points to 12,511.68 points, while the tech-dominated Nasdaq index rose 0.12% to 2,329.56.
US shares also took a knock after industry data showed that house prices suffered their biggest year-on-year decline in 21 years.
"What you're getting is the reality check of the rally we had since the Bear Stearns deal was announced," said Jim Awad, chairman of WP Stewart in New York.
The UK's FTSE 100 ended up 193.9 points, or 3.53%, at 5,689.1, Germany's Dax was 3.24% higher and France's Cac 40 rose 3.49%.The UK's FTSE 100 ended up 193.9 points, or 3.53%, at 5,689.1, Germany's Dax was 3.24% higher and France's Cac 40 rose 3.49%.
'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.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.