US retail sales help shore up markets

PAN PYLAS

LONDON (AP) — Global markets recovered their poise Tuesday, following an earlier sell-off, after the release of solid U.S. retail sales figures.

Investor sentiment had been downbeat for most of the session after U.S. stocks on Monday recorded their worst day so far this year.

On Tuesday, figures showing U.S. retail sales rose a monthly 0.2 percent in December helped shore up markets somewhat. The increase was slightly better than the 0.1 percent anticipated in the markets, though November's rise was revised down.

"On balance the report continues to support signs that the economy has certainly improved and despite a messy employment report, is being driven by the consumer," said Andrew Wilkinson, chief market analyst at Interactive Brokers.

In Europe, the FTSE 100 index of leading British shares rose 0.1 percent to close at 6,766.86 while Germany's DAX gained 0.3 percent to 9,540.51. The CAC-40 in France rose 0.3 percent to 4,274.20.

In the U.S., the Dow Jones industrial average was up 0.5 percent at 16,336 while the broader S&P 500 index rose 0.9 percent to 1,834.88.

On Monday, the S&P closed down 1.3 percent, its biggest fall since November, after comments from the president of the Federal Reserve's Atlanta branch. Dennis Lockhart said he would support further cuts to the Fed's stimulus "over the course of this year" if the economy continued to improve.

The Fed has said it will make an initial $10 billion cut to its $85 billion of monthly financial asset purchases that have supported economic recovery by keeping interest rates low.

Investors were also keeping an eye on corporate earnings, particularly from major banks. JPMorgan Chase, the biggest U.S. bank by assets, said Tuesday that its fourth quarter profit fell, but less than forecast. Its stock traded fractionally higher in New York.

Earlier, Asian stocks ended mostly lower, with Japan leading declines after trading there resumed following a holiday Monday. The Nikkei 225 dived 3.1 percent to 15,422.40. Investors got their first chance since Friday to react to the U.S. jobs report as well as the movement in the yen, which has risen strongly since last week.

Hong Kong's Hang Seng slipped 0.4 percent to 22,791.28 and Seoul's Kospi dropped 0.2 percent to 1,946.07. China's benchmark Shanghai Composite Index, however, added 0.9 percent to 2,026.84.

Elsewhere, the euro was up 0.1 percent at $1.3684 while the dollar rose 0.8 percent to 103.86 yen.