European stocks down as US report dims outlook

European stocks down as US report dims outlook

July 9th, 2012 by Associated Press in Local - Breaking News

Women operate mobile phones in front of the stock index display of a securities firm in Tokyo Monday, July 9, 2012. Asian stocks were lower Monday after a disappointing U.S. jobs report stoked concern that the world's biggest economy remains mired in weak growth. (AP Photo/Koji Sasahara)

Photo by Associated Press /Times Free Press.


MOSCOW (AP) - European stock markets had a weak start on Monday after a disappointing U.S. jobs report at the end of last week dimmed the outlook for the world's largest economy.

Britain's FTSE 100 shed 0.5 percent in morning trading to 5,634.31. France's CAC-40 dropped 0.6 percent at 3,148.22 while Germany's DAX was down 0.3 percent at 6,389.64.

The U.S. economy added a less than expected 80,000 jobs last month, the Labor Department said Friday. The tepid employment growth, which followed the first drop in U.S. manufacturing in three years, increases pressure on the Federal Reserve to implement monetary stimulus measures known as quantitative easing.

"The markets start the new week in gloomy spirits as economic growth concerns are clearly back in investors' minds," Moscow-based UralSib bank said in a morning note. "The weak U.S. payrolls report on Friday added to already-negative sentiment and ensured that markets ended the week in a risk-off mode."

Wall Street was poised to fall with Dow futures down 0.5 percent at 12,662. Broader S&P 500 futures eased 0.5 percent to 1,344.9.

Markets in Europe were also spooked by news from Spain where borrowing costs on its benchmark 10-year bond hit 7 percent as finance ministers of the Eurozone gather in Brussels on Monday to discuss terms of a rescue package for the country's banks. The interest rate on the country's 10-year bond rose 0.13 percent Monday morning to a level that market-watchers consider unaffordable for a country to raise money on the bond markets in the long term. Spain's IBEX-35 index dropped 1.5 percent in morning trading to 6,638.2.

In crisis-hit Greece, a new three-party coalition government won a vote of confidence in parliament early Monday, ending a period of uncertainty that led to two elections in less than two months. Greece, however, still has a long way to go to emerge from a deep recession and pay down its huge debt.

Asia closed lower on Monday. Japan's Nikkei 225 index fell 1.4 percent and Hong Kong's Hang Seng slid 1.9 percent. South Korea's Kospi slipped 1.2 percent and China's Shanghai Composite tumbled 2.4 percent to 2,170.81.

Inflation figures for China released Monday showed the consumer price index at its lowest since January 2010. That will give Beijing leeway to continue adding stimulus to fight an economic slowdown.

On Friday, the Dow Jones industrial average closed down 1 percent at 12,772.47. The Standard & Poor's 500 fell 0.9 percent to 1,354.68. The Nasdaq composite was down 1.3 at 2,937.33.

Benchmark oil for August delivery was up 20 cents at $84.65 a barrel in electronic trading on the New York Mercantile Exchange. Crude fell $2.77 cents to settle at $84.45 on Friday in New York.

In currencies, the euro inched down to $1.2281 from $1.2285 on Friday in New York. The dollar was little changed at 79.65 yen from 79.68 yen.