U.S. Stocks End on Positive Note; Asia, Europe Markets Decline

U.S. markets seesawed this morning after another day of declines on stock markets in Asia and Europe and ahead of an important round of new economic data scheduled to be released this week.

On Wall Street, U.S. indexes began the day with small gains, fell sharply, then rebounded into positive territory. The Dow Jones industrial average finished the day at 12,384 with a gain of 177 points, an increase of 1.45 percent. The Standard & Poor's 500 index was up more than 23 points, or 1.75 percent, at 1,354. The Nasdaq composite index rose about 24 points, 1 percent, to 2,350.

Overseas the mood was more clearly pessimistic, with continued concern about the U.S. economy and the global financial system pushing stocks down.

Some Asian exchanges fell by nearly 7 percent overnight, as investors worried that a slowdown in the United States will hurt Asian exporters. In Europe, jitters about the health of bank and financial companies pushed major exchanges down between 1 and 2 percent.

Coming days will bring several new reports about the U.S. economy, including an estimate of how quickly the economy was growing in the last three months of 2007, the latest reading on unemployment, and an announcement by the Federal Reserve on whether it will cut interest rates again.

New data released this morning on the housing market provided no solace: according to government estimates new home sales, on a seasonally adjusted annual basis, dropped in December by about 40 percent compared to the same month a year ago.

A U.S. government report, due out Wednesday, will likely show that growth is slowing, according to economists surveyed by Bloomberg News. The median estimate was a 1.2 percent annualized growth rate from October to December, a quarter of the previous three months' pace.

Later that day, the Federal Reserve will release its latest policy statement on interest rates. The bank cut rates by three-quarters of a percentage point last week after global stocks began to plummet. Investors are expecting a further reduction this week.

The unemployment report will be released on Friday, giving a measure of how slowing growth is affecting U.S. labor markets.

In Japan, where the benchmark Nikkei fell nearly 4 percent, much of the selling was of shares in steelmakers, machinery producers and exporters. Hitachi Construction plunged 14 percent. Video game console maker Nintendo, which depends heavily on the U.S. market, was also hit hard, falling 9.7 percent. Sony Corp. was down 4.5 percent.

In South Korea, where the benchmark Kospi fell 3.9 percent, shipbuilders took a hard hit, as did banks and construction firms. The country's largest corporation, Samsung Electronics Co., dropped 3.9 percent while Hyundai Heavy Industries Inc. plunged 5.3 percent.

The Shanghai composite index fell 7.2 percent over worries about Chinese exporters dependent on U.S. consumer spending. There also has been concern that earnings may be hurt by energy shortfalls due to heavy snowstorms throughout the country. The government has rationed electricity use in some factories and has ordered coal companies to stop exports for at least two months.

Among the only stocks that did well Monday were those of coal companies, such as China Shenhua Energy, China Coal and Yanzhou Coal, which were up 3 to 4 percent on the Hong Kong Stock Exchange.

"This year will see a rise of economic uncertainties and market volatility," said Shen Minggao, an analyst for Citigroup in Beijing. "The Chinese government needs to loosen its tight monetary policy, but there has been no such action yet."

Major European indexes had dropped between 1.5 percent and 2 percent by late morning, with banks and financial firms hard hit by concerns about possible losses related to subprime mortgages and other risky debt.

"There's a lot of uncertainty out there. Uncertainty over the U.S. economy, uncertainty over China's economy," Rob Hart, an analyst with Morgan Stanley in Hong Kong, told the Associated Press.