Stocks mostly down amid economic uncertainty

PARIS (AP) ? Stocks edged down Wednesday as investors varied between cheering the modest recovery in the United States and wondering if the world economy was still bad enough to push central banks to act.

With many market players in wait-and-see mode, trading has been thin and erratic in recent days. Investors are cautious about taking risky bets with so many unclear signals on the direction of the economy.

In Europe, the FTSE index of leading British shares fell 0.6 percent to close at 5,743.53, while France's CAC-40 pulled back 0.5 percent to 3,413.89. The DAX in Germany, meanwhile, eked out a gain of 0.1 percent at 7,010.57.

The U.S. Commerce Department announced Wednesday that the American economy grew at a 1.7 percent annual rate in the April-June quarter, the latest in a string of signs the world's No. 1 economy is experiencing a modest recovery. That revision was slightly better than the initial estimate of 1.5 percent. The news, however, failed to boost U.S. markets.

The modest improvement is still insufficient to lower the unemployment rate, and investors have been hoping that the Federal Reserve might act to give the economy a boost. More information on the Fed's thinking will come later Wednesday, when the bank releases its "Beige Book" survey on how the economy is faring. Also, Fed Chairman Ben Bernanke will give a speed in Jackson Hole, Wyoming, on Friday.

The Dow Jones industrial average was flat at 13,109, while the broader Standard & Poor's index was also trading even at 1,411.

Investors are meanwhile trying to read the tea leaves on the European Central Bank, which has indicated it is ready to intervene to push borrowing costs lower for struggling countries ? but hasn't spelled out how or when it will act. On Tuesday, President Mario Draghi canceled his trip to Jackson Hole, leading many to speculate the bank is drafting a plan of action.

Hopes for central bank action in Europe, however, were mostly overwhelmed by bad news. On Tuesday, the Spanish region of Catalonia asked for a ?5 billion rescue loan. That's an added burden on the government in Madrid, which is trying to prop up sinking banks and restart growth ? and some fear it could push Spain's economy into its own bailout.

"For most of August little has been able to disturb the narrative of ECB action that is expected in September, but this morning that theory is under threat as one of the largest Spanish regions makes a request for assistance from Madrid," said Chris Beauchamp, a market analyst at IG Index.

The euro fell 0.1 percent to $1.2544, while the yield, or interest rate, on Spain's benchmark 10-year bond stood uncomfortably at 6.42 percent. That's close the 7 percent mark that has pushed other countries to seek rescue loans.

Earlier in Asia, stocks were mixed. The Tokyo Stock Exchange's benchmark Nikkei rose 0.4 percent to 9,069.81 and South Korea's Kospi added 0.6 percent to 1,928.54. Hong Kong's Hang Seng Index turned 0.1 percent lower at 19,788.51. Australia's S&P/ASX 200 lost nearly 0.1 percent to 4,356.04.

Benchmarks in Singapore and Taiwan rose, while Indonesia and Thailand fell.

On mainland China, the Shanghai Composite Index lost 1 percent to 2,053.24 ? its lowest closing in more than three years. The Shenzhen Composite Index lost 0.6 percent to 851.14.

Benchmark oil for October delivery fell $1.18 to $94.14 per barrel in electronic trading on the New York Mercantile Exchange.

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Martin Crutsinger in Washington, Fu Ting in Shanghai and Youkyung Lee in Seoul, South Korea, contributed to this report.

Source: http://news.yahoo.com/stocks-mostly-down-amid-economic-uncertainty-113841339--finance.html

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