World Stocks Muted Ahead Of US Growth Figures

CARLO PIOVANO

LONDON (AP) — World stocks turned lower on Friday after official data showed the U.S. economic recovery was not as fast as many had hoped.

The Commerce Department said that the U.S. economy, the world's largest, grew at a modest 2.8 percent in the final three months of last year. While that is the fastest growth in 2011, economists had expected growth of 3 percent.

A cut in government spending was offset partly by a rise in inventories, which are expected to slow back down in the early months of 2012, hurting growth. After that, "growth will pick up again by late spring," said Harm Bandholz, chief U.S. economist at UniCredit Bank.

With the data suggesting the U.S. recovery would continue to be a slow process, investors sold off stocks to cash in on gains made so far this month.

Britain's FTSE 100 was down 1.1 percent to 5,733 while Germany's DAX fell 0.4 percent at 6,511.98 and France's CAC-40 lost 1.3 percent to 3,318.76. The euro was up 0.83 percent at $1.3189.

Wall Street edged lower on the open — the Dow Jones industrial average fell 94 points to 12,639 and the S&P 500 5.8 points to 1,312.

Other economic and corporate news released Friday contributed to sour market sentiment.

Consumer products maker Procter & Gamble Co. cut its earnings outlook and Ford Motor Co. fell short of Wall Street expectations, while Japanese games and electronics companies Nintendo and NEC issued profit warnings.

In Europe, traders digested grim statistics from Spain showing more than 5 million people without jobs. The National Statistics Institute said the jobless rate shot up from 21.5 percent — already the highest in the eurozone — to 22.8 percent in the fourth quarter.

Attention was also focused on the resumption of talks to reach a deal on how Greece can avoid a catastrophic default on its debt. Greece and its bailout rescuers — other countries that use the euro and the International Monetary Fund — are asking private creditors to swap their Greek bonds for new ones with a lower value, interest rate and much longer maturity.