Global stocks under pressure

Global stock markets were under pressure Wednesday after another series of weak US economic data proved a rude reality check after recent gains on government efforts to tame the financial crisis.

Dealers said a larger-than-expected 200-billion-euro (260-billion-dollar) stimulus package for the eurozone failed to impress while doubts remained about Washington's latest 800-billion-dollar bid to get credit flowing again.

They said there was continued profit-taking after massive .gains Friday and Monday, stoking concerns that the markets may not yet have found the long awaited floor investors believe should be there after this year's losses.

By any measure, stocks offer good value after the turmoil of the past few months but with confidence gone and the economy stalled by frozen credit markets, investors remain extremely cautious about committing funds long term.

US data were not encouraging, suggesting the US economy was sliding into a very deep and lengthy recession.

US consumer spending dropped 1.0 percent in October, the steepest fall since September 2001, while key durable goods orders plunged 6.2 percent, way ahead of forecasts for 2.5 percent.

"Demand is evaporating not just domestically but globally for big-ticket capital equipment investments," said Nigel Gault at IHS Global Insight.

Meanwhile, new claims for unemployment benefits rose to a fresh 16-year high, completing a picture of an economy sinking deep into recession.

"The combination of sharp declines in consumer spending and capital goods shipments ... points to a very weak fourth-quarter (growth) report ... we think a decline (around) 4.0 percent looks likely," said John Ryding at RDQ Economics.

The US economy contracted 0.5 percent in the third quarter.

"Availability of credit continues to be a major detriment to both consumer and business spending and investment and consumption cannot bounce back until credit starts flowing again," said Marisa DiNatale at Economy.com .

Wall Street opened sharply lower after the figures but managed to find some support despite the gloomy data as investors tried to hedge their bets.

The Dow Jones Industrial Average was up 0.83 percent at around 1700 GMT.

Patrick O'Hare at Briefing.com said the market was cautious in the face of the latest massive US and European stimulus measures.

"The problem at the moment with all of the stimulus is that it is creating a feeling of unease that governments around the globe are behind the curve in trying to reverse the effects of the financial crisis," he said.

"Accordingly, there are concerns that the slowdown will run deeper and longer than expected."

In London, the FTSE 100 index of leading shares closed down 0.44 percent at 4,152.69 points. In Paris, the CAC 40 fell 1.24 percent to 3,169.85 points while in Frankfurt the DAX was virtually unchanged at 4,560.50 points.

As was to be expected after such sharp gains earlier in the week, investors opted to take some quick profits, said Xavier de Villepion of Global Equities in Paris, adding that the US data added to the negative tone.

Elsewhere in Europe, Amsterdam slipped 0.28 percent, Brussels lost 2.14 percent, Madrid was down 0.49 percent, Milan added 0.62 percent and Swiss stocks rose 0.37 percent.

In Asia, Tokyo finished 1.3 percent lower and Sydney slipped 2.3 percent but Hong Kong rose 3.8 percent, buoyed by an unexpectedly large Chinese interest rate cut.

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