LONDON (AP) — Financial markets recovered their poise Thursday, though investors remained concerned that Greece and Spain will struggle to implement thier debt-reduction strategies.
The mood in markets improved modestly from Wednesday, when violent street protests in Greece and Spain over upcoming austerity packages spooked investors.
In Greece, the leaders of the three parties that make up the coalition appear to have agreed to the broad outlines of a spending cuts package that the country must impose to keep receiving vital rescue loans. The meeting took place a day after more than 50,000 anti-austerity protesters took to the streets of Athens.
Greater focus was been centered on Spain, where the government unveiled new austerity policies amid mounting concerns over the country's economic future.
Recession-hit Spain has come under pressure to tap a bond-buying program from the European Central Bank that has been partly designed to keep a lid on the country's borrowing costs. But the government has been reluctant to request the help for fear of the conditions attached.
That has unnerved markets, ending the recent weeks' relative calm in markets.
"You have to admire European politicians for their consistent ability to be able to snatch defeat from the jaws of victory," said Gary Jenkins, managing director of Swordfish Research.
Spain's new austerity and economic reform package, which was still being unveiled at the end of the European trading session, comes in the wake of a violent protest in Madrid and big falls in Spanish stocks.
Stocks in Spain added to the previous day's hefty loss as the government started its press conference on the economic reforms. The main IBEX index in Madrid closed down 0.15 percent at 7,842. Meanwhile the yield on the country's 10-year bonds eased back below 6 percent.
Elsewhere, Europe's main markets pushed higher but the gains were dwarfed by Wednesday's losses.
The FTSE 100 index of leading British shares was up 0.2 percent at 5,778 while Germany's DAX rose 0.2 percent to 7,290. The CAC-40 in France was 0.7 percent higher at 3,439.
In the U.S., investors brushed aside figures showing a downward revision to second quarter economic growth and focused on the fact that weekly jobless claims fell to their lowest level in two months. The Dow Jones industrial average was up 0.4 percent at 13,466 while the broader S&P 500 index rose 0.7 percent to 1,443.
The euro was up at $.1.2887 while the benchmark New York oil price rose $1.22 to $91.20 a barrel.
The market gains started earlier, in Asia, helped by expectations the People's Bank of China will soon take more steps to ease a slowdown in the world's No. 2 economy.
Hong Kong's Hang Seng climbed more than 1.1 percent to 20,762.29 and mainland China's Shanghai Composite Index jumped 2.6 percent to 2,056.32. The smaller Shenzhen Composite Index also gained 2.6 percent to 837.96.
Japan's Nikkei 225 rose about 0.5 percent to 8,949.87, a day before the release of industrial production and retail sales figures.
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