World stock markets lackluster

HONG KONG -- Most Asian markets fell today as investors tread cautiously ahead of a key U.S. jobs report expected to show unemployment hit a 26-year-high despite signs of recovery in the world's largest economy. European markets opened lower.

Markets across Asia zigzagged in thin trade throughout the day before closing mostly lower, suggesting investors were reluctant to place bets for now. Oil prices slipped below $69 a barrel, while the dollar gained modestly against the yen and euro.

Investors will be watching closely U.S. jobs figures, due out later today, that economist say will show another uptick in the unemployment rate from 9.4 percent in May to 9.6 percent in June -- marking the highest since 1983.

Growing unemployment has kept investors on edge in recent months because it suggests the financial health of American consumers, whose spending habits are so critical to the U.S. economy and Asian exporters, is shaky.

While economists see the U.S. shedding 363,000 jobs in June compared to 345,000 in May, that might be cause for modest optimism among investors because it would add to the evidence that rate of layoffs is declining and companies have already made their most severe cuts.

European markets followed Asia lower as investors awaited the European Central Bank's interest rate decision. The bank is widely expected to keep its key interest rate steady at 1 percent while gauging whether a massive infusion of credit into the banking system will help Europe's struggling economy.

Britain's FTSE 100 lost 0.8 percent, Germany's DAX shed 1.6 percent and France's CAC-40 was off 1.3 percent. U.S. futures pointed to a lower open Thursday. Dow futures dropped 45, or 0.5 percent, to 8,403 and S&P futures were down 5, or 0.5 percent, to 914.20.

Despite overnight gains on Wall Street yesterday, Asian markets couldn't hold an early rise in the day.

Tokyo's Nikkei 225 stock average gave back its gains to fall 63.78, or 0.6 percent, to 9,876.15. In Hong Kong, the Hang Seng fell 200.68 points, or 1.1 percent, to 18,178.05, after the market was closed yesterday for a holiday.

Elsewhere, Korea's Kospi closed flat in back-and-forth trade. Markets in Australia and Shanghai gained, while India's Sensex was down 0.6 percent. Taiwan's benchmark rose 1.4 percent.

In the U.S. overnight, reassuring data on manufacturing and housing lifted Wall Street higher to start the quarter.

The Dow rose 57.06, or 0.7 percent, to 8,504.06. It climbed as high as 8,580.47 in earlier trading, but then pared its gains as the day went on. The Standard & Poor's 500 index rose 4.01, or 0.4 percent, to 923.33. The Nasdaq composite index rose 10.68, or 0.6 percent, to 1,845.72.

Oil prices slipped below $69 a barrel late in the day in Asia, with benchmark crude for August delivery off $1 at $68.31. On Tuesday, it fell 58 cents to settle at $69.31.

The dollar traded at 96.68 yen from 96.51 yen late yesterday in New York. The euro was lower at $1.4095 from $1.4150.

-- The Associated Press