Markets lackluster as week's big events loom

Associated Press

LONDON (AP) — A mixed batch of economic data kept a lid on markets Wednesday ahead of a keenly awaited policy meeting of the European Central Bank and the U.S. jobs report for January.

In Europe, trading was lackluster through the day as investors digested the news that retail sales across the 18-country eurozone fell a monthly 1.6 percent in December. Offsetting that disappointment was a fairly positive economic survey from financial information company Markit. Its purchasing managers index — a broad gauge of business activity — rose to 52.9 in January, its highest level since June 2011.

Given the mixed signals, the ECB meeting and the ensuing press conference from its president, Mario Draghi, could have repercussions for markets.

The FTSE 100 index of leading British shares closed a tad higher at 6,457.89 while Germany's DAX fell 0.1 percent to 9,116.32. The CAC-40 in France ended more or less flat at 4,117.79.

In the U.S., trading was equally uninspiring. Though the monthly ADP private payrolls report was slightly worse than expected, the services report from the Institute for Supply Management was solid. Both sets of numbers, however, play second fiddle to Friday's nonfarm payrolls data.

The Dow Jones industrial average was down 0.1 percent at 15,424 while the broader S&P 500 index fell 0.4 percent to 1,748.

Stocks around the world have had a tough start to the year after many indexes, including the two major Wall Street ones, hit record highs in 2013 on hopes over the global economy.

"It seems to me that the cozy consensus of a broad acceleration of global economic growth painted at the start of 2014 already seems wishful thinking," said Michael Ingram, market strategist at BGC Brokers.

Many reasons for the turmoil have been touted, including uncertainty over the outlook for emerging economies, such as India, Brazil and Turkey, in the wake of the U.S. Federal Reserve's recent moves to reduce its monetary stimulus. The stimulus, in its various guises, has helped shore up markets, particularly in developing countries from Brazil to Turkey to India, since the financial crisis.

Investors may also be getting nervous about the fact that U.S. lawmakers have yet to agree on a deal to lift the debt ceiling this month. If they don't, the U.S. faces the prospect of defaulting on some of its debts.

Earlier in Asia, Japan's Nikkei recovered some of the previous day's losses, closing 1.2 percent higher at 14,180.38 while Hong Kong's Hang Seng fell 0.6 percent to 21,269.38. Elsewhere, Chinese markets remained closed for the Lunar New Year holiday until Friday.

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