World Stocks Hold Steady After US Housing News

On Monday, stocks around the world surged after monthly manufacturing surveys stoked hopes that the world economy could be poised for a return to growth in the second half of the year, which helped both the Dow and the S&P to hit their highest levels since January.

Stocks around the world have rallied strongly since mid-March, with some major indexes moving into positive territory for the year. The trigger for the gains has been better than expected economic news, particularly in the U.S., which has fueled an increase in appetite for risk on hopes that the global recession is receding.

Earlier in Asia, Japan's benchmark Nikkei 225 stock average added 26.56 points, or 0.3 percent, to 9,704.31, setting a fresh eight-month high. Australia's index added 1.6 percent and Shanghai's benchmark was up 0.1 percent.

But Hong Kong's Hang Seng lost 2.7 percent to 18,389.08 after jumping 4 percent the previous session. South Korea's Kospi gave up early gains to trade down 0.2 percent amid more concerns North Korea is preparing to launch three or four medium-range missiles.

Oil prices were down slightly in electronic trading on the New York Mercantile Exchange with the benchmark contract off 19 cents at $68.39 a barrel — just shy of the seven-month highs recorded on Monday.