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Global markets falter on US data

Monday, December 03 16:32:36

Global shares faltered today after U.S. manufacturing unexpectedly contracted in November, falling to the lowest in more than three years, but crude prices rose on signs of revived growth in China, the world's second-biggest oil consumer.

In a sign U.S. manufacturing may be struggling to gain traction, the Institute for Supply Management said its index of national factory activity fell to 49.5 from 51.7 in October.

The figure was the softest since July 2009, when the U.S. economy was struggling in the aftermath of the financial crisis and may have been affected by superstorm Sandy, which hit the U.S. East Coast in late October.

A Reuters poll of economists had expected a 51.3 reading.

Wall Street opened higher, following gains in European equity markets, upbeat factory data from China and a slower contraction in European manufacturing, but subsequently moved lower. "We have a bit of a downside in ISM data compared with expectations, which signals the U.S. economic recovery will not be roaring away," said Ole Hansen, Saxo Bank vice president. The Dow Jones industrial average was down 35.25 points, or 0.27 percent, at 12,990.33. The Standard and Poor's 500 Index was down 1.84 points, or 0.13 percent, at 1,414.34. The Nasdaq Composite Index was up 0.79 points, or 0.03 percent, at 3,011.03.

European shares trimmed gains on the U.S. manufacturing report. The FTSEurofirst 300 index of top European shares was up 0.06 percent at 1,120 after earlier rising to 1,128.65, its highest level in 17 months. World shares were up 0.1 percent at 332.92.

The euro leaped to its highest level against the U.S. dollar in six weeks as concerns abated about debt-burdened Greece and Spain while Chinese data allayed worries about global growth.

The euro was up 0.5 percent at $1.3049, while the U.S. dollar index fell 0.29 percent to 79.920.