The Associated Press
LONDON (AP) - European and U.S. stocks fell Wednesday as investors looked past strong data in the U.S. and Germany to question the sustainability of any recovery in the global economy.
Germany's DAX was down 44.22 points, or 0.8 percent at 5,512.87, while Britain's FTSE 100 lost 35.80 points, or 0.7 percent, to 4,881.00. France's CAC-40 slid 18.33 points, or 0.5 percent, to 3,662.28.
Wall Street also opened lower, with the Dow Jones industrial average down 45.20 points, or 0.5 percent, to 9,494.09 and the Standard&Poor's 500 down 5.39, or 0.5 percent, to 1,022.61.
Asian markets had risen earlier, catching up with Tuesday's world gains after the release of U.S. data showing an increase in American house prices and consumer confidence.
But equities were unable to sustain the gains Wednesday despite a better-than-expected rise in durable goods orders in the U.S. - up 4.9 percent on the month in July compared with forecasts of a 3 percent rise.
Even when stripping out the volatile transporation sector, orders rose 0.8 percent, the third monthly increase.
"The continued recovery in U.S. durable goods orders in July adds to the evidence that output in the manufacturing sector is expanding again," said Paul Ashworth, senior U.S. economist at Capital Economics.
"The factory sector is obviously enjoying a rebound in demand, some of it from abroad and some of it linked to inventory building."
Investors nevertheless have yet to be convinced that a strong recovery is underway as long as the longer-term outlook for the global economy is burdened by rising unemployment, lingering uncertainties in credit markets and strained household finances.
"With the consumer still supine, we don't yet have the foundations for a sustainable recovery," Ashworth said.
In fact, German stocks fell despite data showing the country's business confidence rose for a fifth consecutive month in August. The index in the closely watched Ifo survey, released Wednesday, rose to 90.5 points from 87.4 points in July, about as expected and confirming Europe's largest economy is on the mend.
"The index is now back to its pre-Lehman level," said Frederik Ducrozet, economist at Credit Agricole in Paris, referring to the collapse of the U.S. investment bank last September.
He said confidence "is likely to continue to rise in the coming months" as improvements look more solid and broad-based than earlier this year.
Still, the data gave little support to stock markets, "maybe because the market is slowly becoming 'used' to good European data," Ducrozet said.
In China, markets were similarly cautious. Beijing is in the midst of a two-year, 4 trillion yuan ($586 billion) effort to boost domestic consumption by pumping money into the economy. Economic growth accelerated to 7.9 percent in the latest quarter, but weak corporate profits and other areas suggest that a recovery is not yet firmly established.
Hong Kong's Hang Seng Index rose 0.1 percent to 20,456.32 while the Shanghai Composite Index gained 1.8 percent to 2,967.59, only partially making up for sharper losses the previous day.
Japan's Nikkei 225 index climbed 1.4 percent to 10,639.71. Shares of Toyota Motor Corp. advanced 1.5 percent after the world's biggest automaker announced its latest production cuts, spurring investor hopes for better efficiency and profits.
Benchmarks in South Korea, Singapore, Australia and New Zealand also rose. Taiwan was the region's only major decliner, falling 1.3 percent.
Crude oil prices dropped in European electronic trade, with benchmark crude for October delivery down $1.13 to $70.92 after falling 3 percent overnight.
The dollar rose to 94.51 yen from 94.19 yen while the euro fell to $1.4226 from $1.4301.
Associated Press writer Tomoko A. Hosaka in Tokyo contributed to this report.