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| US stocks decline after weak data |
| US stocks fell in Tuesday trading, after weak consumer confidence data reignited concerns about the health of the US economy
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| UNITED STATES OF AMERICA
, 25-March-2008
11:8:24 AM |
| The main Dow Jones index fell 0.5%, after the closely watched Conference Board report indicated US consumer morale was at a five-year low.
Wall Street had rallied on Monday on news that JP Morgan Chase had raised its takeover offer for Bear Stearns.
European shares trimmed earlier gains but remained in positive territory.
The benchmark Dow Jones industrial average fell 48.60 points to 12,500.04 points, while the tech-dominated Nasdaq index was flat at 2,327.84.
US shares also took a knock after industry data showed that house prices suffered their biggest year-on-year decline in 21 years.
"What you're getting is the reality check of the rally we had since the Bear Stearns deal was announced," said Jim Awad, chairman of WP Stewart in New York.
The UK's FTSE 100 was up 138.5 points, or 2.5%, at 5,677, Germany's Dax was 2.76% higher and France's Cac rose 2.58%.
'Ready for a rebound'
JP Morgan's higher offer for troubled Bear Stearns has eased fears about the extent of woes in the banking sector.
But analysts were divided on whether Tuesday's gains in Europe and Asia were likely to continue.
"I think this is the beginning of a rally," said Francis Lun, a general manager at Fulbright Securities in Hong Kong.
"We have gone down low enough and the market is ready for a rebound. Banks will lead the rally."
But Societe Generale's Arthur van Slooten said the gains may only "be a temporary relief".
"To be convinced that this is the floor, we need more indications that the credit market is stabilising," he said.
"Until that happens, equities will remain under pressure, so this could be a small rally in a bear market."
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