LONDON (AP): European stock markets trimmed some of their earlier losses Thursday after better than expected U.S. retail sales figures for February supported Wall Street futures despite more grim jobs news from the world's largest economy.
The FTSE 100 index of leading British shares was down only 13.84 points, or 0.4 percent, at 3,679.97, while Germany's DAX was 23.86 points, or 0.6 percent, lower at 3,890.24. The CAC-40 in France fell 43.06 points, or 1.6 percent, at 2,631.14.
Earlier in the day, Europe's main markets had been trading even lower due to grim economic and corporate news and unease ahead of this weekend's G20 meeting of finance ministers and central bankers.
However, a far more modest decline in U.S. retail sales during February helped Wall Street futures recoup some ground. Before the open, Dow futures were only 5 points, or 0.1 percent, lower at 6,909 while the broader Standard & Poor's 500 futures was unchanged at 720.50.
The Commerce Department reported Thursday that retail sales edged down 0.1 percent last month, less severe than the 0.5 percent drop that economists had expected. The government also revised January's performance to show a 1.8 percent rise, the biggest increase in three years and stronger than the 1 percent gain that was originally reported.
U.S. stocks had posted their first two-day rally for a month on Wednesday amid relief that ailing U.S. banking giant Citigroup Inc. said it was performing better than at any time since the autumn of 2007.
The modest relief over the retail sales helped offset the impact of another disappointing jobless claims release. The Labor Department said first-time requests for unemployment insurance increased to 654,000 from the previous week's figure of 639,000, above analysts' expectations.
There was also some tension in markets ahead of the G20 meeting of finance ministers and central bankers in southern England, which starts Friday and could see the world's leading industrial nations divided over how to best get the global economy back on track.
On Wednesday, U.S. Treasury Secretary Tim Geithner had called for bigger fiscal stimulus actions around the world and more money to be given to the International Monetary Fund.
Geithner's comments came as hopes of a unified plan emerging at the G20 leaders' meeting were fading fast, due to an apparent split between the U.S. and the 16-nation euro zone over the best way forward.
Even though Geithner agreed that the international financial regulatory regime should be a topic of discussion this weekend, his emphasis clearly was on the need for governments around the world to spend their way out of recession.
That call will likely fall on deaf ears in Europe, where many governments are arguing that there is no further need at the present time for additional tax cuts or spending boosts.
``The rift between Europeans and the U.S. ahead of the G20 meeting on April 2 has created substantial psychological damage to markets,'' said Hans Redeker, an analyst at BNP Paribas.
Despite the hopes that Citigroup may have turned the corner, the mood in the markets remained volatile as the economic and corporate news from all corners of the world continued to disappoint.
With China reporting a slump in retail sales growth in February and many companies across Europe, such as Italian luxury goods maker Bulgari SpA, German fertilizer supplier K+S AG and car giant BMW AG, reporting hard times ahead, investors looked to book profits accumulated earlier in the week.
Official government figures also confirmed that Japan, the world's second largest economy, saw output contract at its sharpest rate in 35 years in the fourth quarter of 2008.
Earlier in Asia, Japan's Nikkei 225 stock average fell 177.87 points, or 2.4 percent, to 7,198.25 but Hong Kong's Hang Seng recovered early losses to gain 0.6 percent to 12,001.53.
Earlier in Asia, South Korea's Kospi inched marginally higher but markets in Singapore, Australia, mainland China, Taiwan and elsewhere traded lower.
Oil prices recovered somewhat from a steep fall overnight, with benchmark crude for April delivery up 88 cents at $43.21 a barrel in Asian trade. On Wednesday, the contract tumbled $3.38, or more than 7 percent, to settle at $42.33.
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