Asia stocks mixed ahead of earnings; Europe gains

By PAMELA SAMPSON Associated Press Writer

BANGKOK (AP) - Asian markets were mixed Tuesday as investors stayed cautious ahead of earnings reports despite positive figures on new U.S. home sales and an upbeat forecast from shipping giant FedEx. European shares were up.

Traders in Europe saw buying opportunities ahead of a slew of earnings reports. A survey showing rising German consumer confidence added weight to the belief that the global recovery was gaining steam.

Oil prices hovered for a second day near $79 a barrel as investors weighed a three-day stock market rally against signs of sluggish U.S. crude demand. The yen dropped against the dollar, while the euro rose.

Britain's FTSE 100 index was up 0.7 percent to 5,387.27; Germany's DAX gained 0.4 percent to 6,217.70. France's CAC-40 was the strongest gainer, up 0.9 percent to 3,668.87. Wall Street was set for a lift, with Dow futures up 34 points, or 0.3 percent, to 10,491. S&P 500 futures rose 4.5, or 0.4 percent, to 1,114.

Some investors found comfort in news that shipping giant FedEx Corp. raised its profit outlook. In Europe, earnings from Germany's Deutsche Bank AG exceeded expectations, and a survey showed that German consumer confidence is up strongly.

Hong Kong's Hang Seng closed up 133.48 points, or 0.6 percent, to 20,973.39. And India - which took steps to combat inflation by hiking key interest rates more than expected - saw its benchmark Sensex index rise 0.6 percent to 18,127.66 points in midafternoon trade on the Bombay Stock Exchange.

But confidence flagged elsewhere, with some analysts saying markets remain fragile and easily swayed by insignificant events.

"It's an up-and-down market. Investors are swinging from greed to fear," said Kwong Man Bun, chief operating officer at Asia Ltd. in Hong Kong. "I think there is profit-taking pressure."

South Korea's Kospi Index fell, albeit slightly, by less than 1 point to settle at 1,768.31. Japan's benchmark Nikkei 225 stock average was off 6.81, less than 0.1 percent, to 9,496.85 after spending the morning in positive territory. China's Shanghai Composite Index declined 0.5 percent to 2,575.37. Benchmarks in Taiwan and New Zealand also lost ground.

Many traders are likely waiting for hundreds of earnings reports to be released this week in the U.S., Europe and Asia before making any major investing decisions, analysts said.

"Volume is lower than normal," said Tey Tze Ming, a trader at Saxo Capital Markets in Singapore. "There have been so many disasters in the making, it does seem a little hard for stocks to do well."

FedEx - considered a barometer for how the U.S. economy is doing - gave investors reason to buy when it said its overnight and ground delivery businesses are doing better than expected, and that it expects a moderate global economic recovery.

In New York, the Dow Jones industrial average rose 100.81 points, or 1 percent, to 10,525.43 Monday, up for the third straight trading session, as investors welcomed better-than-expected new home sales in June.

The Commerce Department said Monday the sales jumped nearly 24 percent last month to an annual rate of 330,000 units, more than economists expected. The June data marked a rebound in sales from a record low in May of 267,000 units.

May's number, which was revised downward, marked the slowest pace in records dating back to 1963. Sales for April and March were also revised downward.

Despite June's increase, U.S. new home sales are far down from their peak as high unemployment, slow job growth and tight credit have kept Americans from buying homes.

The dollar was up against the yen to 87.44 from 86.93 yen. The euro rose to $1.2999 from $1.2986.

Benchmark crude for September delivery was down 18 cents at $78.80 a barrel in electronic trading on the New York Mercantile Exchange. The contract was unchanged to settle at $78.98 on Monday.