European stocks trim gains as US opens down after soft industrial data

European stocks trim gains as US opens down

LONDON — European stock markets gave up early gains Wednesday, as Wall Street opened lower on weak industrial data.

By mid-afternoon London time, Europe’s main markets remained in positive territory after generally upbeat corporate earnings across the continent.

The FTSE 100 of leading British shares was up 19.91 points, or 0.4 percent, at 4,548.75 while Germany’s DAX rose 70.29 points, or 1.4 percent, to 5,245.03. The CAC-40 in France was 49.18 points, or 1.5 percent, higher at 3,380.15.

Despite the gains in Europe, Wall Street opened lower. The Dow Jones industrial average was down 39.75 points, or 0.4 percent, at 9,056.97 soon after the open while the broader Standard & Poor’s 500 index fell 5.33 points, or 0.5 percent, at 974.29.

The losses on Wall Street came after the Commerce Department reported that U.S. June durable goods orders plunged 2.5 percent, much more than the 0.6 percent decline expected in the markets.

Analysts aren’t saying that the subdued performance in the U.S., which followed on from modest losses on Tuesday, marks the beginning of a new downtrend in stocks after a two-week rally sent both the Dow and the S&P, as well as other major markets around the world, up to new highs for the year.

“It does appear that equity markets have finally stabilized somewhat and are no longer simply reacting to every piece of negative data by shedding hundreds of points,” said Philip Gillet, a sales trader at IG Index.

“The longer this period of relative stability lasts, the more weight will be added to the bulls’ view that this is no bear market rally,” he added.

European stocks remained higher despite the soft U.S. open as investors cheered a string of encouraging results.

France’s PSA Peugeot-Citroen reported a big loss for the first half of the year but generated strong cash flow from cost-cutting measures and an inventory drawdown. As a result, hopes that it won’t have to tap shareholders for more cash helped the company’s stock jump 9 percent and to the top of the CAC-40 leaderboard. Rival Renault SA rallied in Peugeot’s slipstream, rising a more than healthy 5.8 percent.

Meanwhile in Germany, Bayer AG topped the DAX index despite sagging second-quarter sales and a 7 percent fall in net profit. The company’s share price rose 5.8 percent after the pharmaceutical and chemical company showed good growth at its health care unit, which makes Aspirin, Alka-Seltzer, Yasmin and the multiple sclerosis treatment Betaseron.

Shares in German auto and truck maker Daimler AG were also in demand — the company’s stock rose 3.9 percent — after it reported a narrower than expected second-quarter loss of euro1.06 billion.

And Akzo Nobel NV, the world’s largest maker of paint, saw its shares jump nearly 8 percent after it said margins had been preserved by cost-cutting and lower raw materials costs despite a 13 percent fall in second-quarter profit.

It wasn’t all good news on the earnings front though, with steelmaker ArcelorMittal SA reporting a bigger than anticipated second-quarter loss and its share price slid 4.8 percent in Paris, and Rexam PLC, Europe’s leading tin can maker, canceled its interim dividend after announcing a 351 million pound rights issue. Its shares fell over 7 percent, making it the biggest faller in the FTSE.

Earlier in Asia, most markets dropped in the wake of the modest retreat in Europe and on Wall Street.

Japan’s Nikkei 225 stock average closed up 25.98 points, or 0.3 percent, at 10,113.24 following a seesaw session, but Hong Kong’s Hang Seng retreated 489.04, or 2.4 percent, to 20,135.50.

The main Shanghai index dived nearly 8 percent at one stage before clawing back some losses, ending down 171.94 points, or 5 percent, at 3,266.43. Even so, the drop was the biggest since last November but followed seven straight gains and arose after reports suggested that China’s two state-owned banks have been asked to limit their lending — another sign that the Chinese authorities are beginning to worry that the country may be growing too fast.

The losses in China came despite a stellar opening by China State Construction Engineering Group Corp., which built the “Water Cube” swimming center for the Beijing Olympics. On its first day of trading, the company’s stock ended 56 percent higher. The company’s initial public offering was the biggest this year, raising a whopping $7.3 billion.

Carmakers were in the spotlight. Nissan Motor Co. reported a smaller-than-expected loss for its fiscal first-quarter and unveiled plans to build more cars in China, one of the few auto markets where sales are still growing. Meanwhile, Honda Motor Co. bucked expectations and remained in profit.

Elsewhere, South Korea’s Kospi inched down 0.1 percent. Markets in Taiwan, Australia and Singapore also lost ground.

Oil prices fell again, with benchmark crude for September delivery down $1.70 at $65.53 a barrel.

Meanwhile, the dollar rose 0.5 percent to 94.98 yen while the euro declined 0.6 percent to $1.4089.

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AP Business Writer Jeremiah Marquez in Hong Kong contributed to this report.