European flat, US opens down on jobless claims, renewed fears about Greece

Europe flat, Wall Street down on jobs, Greece

Major European indexes traded flat while Wall Street opened lower Thursday after a report in the showed U.S. unemployment benefits rose unexpectedly and fears reignited about Greece’s debt crisis.

In Europe, the FTSE 100 index of leading British shares was up 14.77 points, or 0.24 percent, at 5,811.02 while Germany’s DAX dipped 1.44 points, or 0.02 percent, to 6,276.96. The CAC-40 in France was up 7 points, or 0.17 percent, at 4,064.7.

“Confirmation that the Chinese economy grew by a very strong 11.9 percent in Q1 2010, whilst indicating some overheating risks, highlights the boost to global growth that the fast growing economy is providing,” said Mitul Kotecha, analyst at Credit Agricole.

Markets also are focused on the release of industrial production data in the United States, which is expected to show gains, and the release of U.S. treasury flows, which will gauge foreign interest in U.S. securities.

Wall Street opened lower, after a report shows initial claims for unemployment benefits rose unexpectedly for the second straight week. The Dow was down 17.61 points, or 0.16 percent, at 11,105.5 while the broader Standard & Poor’s 500 futures were down 1.18 points, or 0.1 percent, at 1,209.47.

European gains weakend during the day as fears regarding Greece reignited, triggering a renewed widening of spreads between Greek and safety benchmark German debt in Europe putting the euro back under pressure.

Kotecha noted that the markets still lack “faith that Greece can weather the storm” despite the positive response to the debt auction.

Markets gave up earlier gains spurred by the Fed’s new Beige Book survey released late in the European trading day Wednesday said that the economic recovery was spreading to most parts of the United States, with merchants seeing better sales and factories boosting production.

In Asia, Japan’s benchmark Nikkei 225 stock average led gainers, rising 68.89 points, or 0.6 percent, to 11,273.79. Indonesia’s benchmark index also advanced 0.6 percent, South Korea and Hong Kong gained 0.5 percent while Singapore added 0.3 percent.

Australia rose 0.1 percent while China, India and Malaysia were little changed.

Equity investors took heart from signs of strong economic growth in Asia. China said its gross domestic product grew 11.9 percent in the first quarter from a year earlier while Singapore’s economy jumped 13 percent from a year ago.

China reported consumer prices rose 2.2 percent over a year earlier, leading some analysts to herald the high-growth, low-inflation economy — the so-called Goldilocks scenario — as ideal for company profits and equity investing.

“Investors were worried that the Chinese economy was going to experience overheating in general and high inflation,” Morgan Stanley said in a report. “The degree of uncertainty concerning growth and inflation should diminish going forward.”

Traders are eyeing first quarter corporate earnings reports which began this week.

“The overall world economy is recovering, and our advice is to stay long the market,” said Tey Tze Ming, a trader with Saxo Capital Markets in Singapore. “The earnings we’re going to see over the next couple weeks will set the tone, and I think there’s upside from here.”

Markets in Thailand were closed for a holiday.

In New York overnight, the Dow Jones industrial average gained 103.69, or 0.9 percent, to 11,123.11, the highest finish since September 2008. The Dow closed higher Wednesday for a fifth day, buoyed by upbeat earnings from Intel Corp. and JPMorgan Chase.

Investors also chased Wall Street gains on Wednesday on a Commerce Department report showing U.S. retail sales increased in March for the third straight month — a fresh sign that American consumers are starting to spend more.

In currencies, the dollar was steady at 93.15 yen Thursday from 93.21 yen late Wednesday. The euro stood at $1.3597 from $1.3651.

Benchmark crude for May delivery was up 5 cents to $85.89 a barrel.