Friday, October 28, 2011

Stocks, euro pause as Europe doubts linger

US and European shares took a breather on Friday after a strong rally on a long-awaited euro zone rescue deal, but a weak sale of Italian bonds showed investor confidence in the agreement was shaky.

The euro eased from a seven-week high against the dollar, while oil and gold prices declined on skepticism over whether the debt deal is enough to staunch the crisis.

US stocks closed out a fourth week of gains in quiet fashion, edging higher as the market took a breather after rallying 3 percent on Europe's deal to stem its debt crisis.

The Dow Jones industrial average gained 22.56 points, or 0.18 percent, to 12,231.11. The Standard & Poor's 500 Index added 0.49 point, or 0.04 percent, to 1,285.08. The Nasdaq Composite Index shed 1.48 points, or 0.05 percent, to 2,737.15.

European shares slipped after the previous session's rally on the European Union's debt deal, as a disappointing Italian bond auction fuelled investors' scepticism about the plan to tackle the region's debt crisis.

The FTSEurofirst 300 index closed down 0.2 percent at 1,018.14 points and ended the week up 4.1 percent - its biggest weekly gain since early October.

The benchmark index is still down 9.2 percent so far this year as concerns have grown about the macro economic environment and contagion from the euro zone debt crisis.

The Nikkei stock average rose more than 1% to mark a two-month closing high above 9,000, extending gains scored the previous day on the European debt deal with some stocks rising after revisions to profit outlooks were not as bad as feared.

The Nikkei climbed 1.4 percent to 9,050.47, gaining 4.2 percent for the week. The broader Topix index added 1.1 percent to 771.43, rising 3.7 percent over the week.