US: Stocks edge near record; Eurozone shares fall

[New York] US stocks drifted back near record highs on Wednesday, but eurozone shares retreated on worries about slowing global growth.

The S&P 500 added 0.3 per cent as oil prices continued to march higher, lifting many petroleum shares. The broad-based US index is now at 2,119.12, only about 12 points from an all-time record.

Analysts said sentiment has also been boosted by a weaker dollar on expectations the US Federal Reserve will keep rates low.

"We have kind of a creep higher," said Art Hogan, chief market strategist at Wunderlich Securities. "It's a little bit of a no-news, light-trade rally." But Frankfurt lost 0.7 percent and Paris 0.6 per cent as the euro advanced on the weakening dollar.

"Until US numbers make a stronger case for the Fed to boost interest rates, the euro's path of least resistance (against the dollar)appears higher," said Joe Manimbo, senior market analyst at Western Union Business Solutions.

Some analysts also attributed the weakness among stocks on the continent to a downcast outlook from the World Bank, which slashed its growth forecast for the global economy late Tuesday, saying advanced economies were rebounding more slowly than expected and that low commodity prices continued to hurt other countries.

"The European market seems to be still concerned about the health of the global economy," said market analyst Yoav Nizard and currency broker FXCM.

European bank shares were particularly weak, with French giants BNP Paribas and Societe Generale and Germany's Commerzbank and Deutsche Bank all losing between one and 2.5 per cent.

The European Central Bank stepped into uncharted territory Wednesday when it began to buy bonds issued by companies, in a bid to also kickstart eurozone inflation.

The hope is that the companies will use the money to invest, thereby stimulating growth, creating jobs and helping push up prices.

The Nikkei in Tokyo climbed 0.9 per cent, with energy shares such as crude importer Showa Shell Sekiyu and refiner Idemitsu Kosan advancing.

Another gain came from Mitsubishi UFJ, which climbed 2.0 per cent on reports that the banking giant may quit its role as one of the primary underwriters for government bond sales.

AFP