European, US stocks steady as gold hits another new record high

European, US stocks steady as gold hits record

LONDON — European and U.S. stock markets took a breather Wednesday following big gains the previous day as investors awaited key economic news for clues about the pace of recovery. Meanwhile, gold fell back from another record high as the dollar regained some ground.

In Europe, the FTSE 100 index of leading British shares was up 4.29 points, or 0.1 percent, at 5,316.46 while Germany’s DAX rose 2.69 points, or 0.1 percent, to 5,779.30. The CAC-40 in France was up just more than a point at 3,776.89.

In the U.S., the Dow Jones industrial average was up 7.93 points, or 0.1 percent, at 10,479.51 soon after the open while the broader Standard & Poor’s 500 index rose 1.61 point, or 0.2 percent, at 1,110.47.

Markets are awaiting a raft of economic news over the coming couple of days, including Thursday’s monetary policy meeting of the European Central Bank and Friday’s U.S. nonfarm payrolls report for November. The jobs data often set the tone in the markets for a week or two.

If over the week investors conclude that the U.S. economy is losing steam, then that could well pave the way for an end of year bout of profit-taking following an eight-month bull run.

The main piece of economic data Wednesday was the news that private sector employers in the U.S. shed 169,000 jobs in November, according to the ADP payrolls firm. Though that was slightly worse than market expectations, October’s job losses were revised down.

As a result, there was little change in market expectations for Friday’s government payrolls data — the consensus in the markets is that November non-farm payrolls fell by around 120,000 but that the unemployment rate held steady at a 26-year high of 10.2 percent.

So far this week, investor jitters related to Dubai’s debt problems have calmed down amid hopes that Dubai World, the government investment company, will have around $26 billion worth of its debts restructured. Last week, the company — with a total of $60 billion worth of debt — sent shockwaves around global financial markets when it said it was looking to postpone forthcoming debt payments until May.

The hope in the markets is that Dubai’s problems will not affect the global financial system, as some feared last week.

Earlier, Asian stocks powered ahead as they responded to the continuing recovery in Europe and the U.S. On Tuesday, stocks were helped by an easing of tensions related to Dubai’s debt problems and further encouraging U.S. economic data, particularly from the housing sector.

Tokyo shares closed nearly 1 percent higher as investors gave a muted thumbs-up to the Bank of Japan’s new measures to offer cheap loans to commercial banks. The Nikkei 225 stock average was up 36.74 points, or 0.4 percent, at 9,608.94.

Hong Kong’s Hang Seng gained 176.42, or 0.8 percent, to 22,289.57 and South Korea’s Kospi jumped 21.91 points, or 1.4 percent, to 1,591.63. Australia’s benchmark advanced 0.9 percent and China’s Shanghai index climbed 1.1 percent.

Oil prices hung just above $78 after a big jump overnight, while gold slipped back modestly as the dollar regained its composure. By mid afternoon London time, oil was trading 33 cents lower at $78.04 while gold was up 0.9 percent on the day at $1,210.70, down from its new record of $1,218.40. .

Commodity and energy prices are mostly priced in dollars and typically trade inversely to the U.S. currency.

By mid afternoon London time, the dollar was up 0.5 percent on the day at 87.13 yen while the euro was steady at $1.5082, having earlier run up to $1.5110.

Currency traders are on the lookout to see if the euro can push back up towards last week’s 16-month high of $1.5144. If it does so, then it could start to target its all-time highs above $1.60.

“There is potential in the short term for some further upside but with the European Central Bank meeting this week, there is bound to be some concern about the high level of the euro with respect to European exporters and this could weigh,” said Michael Hewson, an analyst at CMC Markets.