World markets fall as U.S. recovery doubts linger

BANGKOK -- World stock markets were lower today despite improvement in U.S. manufacturing as doubts lingered about the durability of a rebound in the world's largest economy.

Asian stocks, which tumbled the day before on a fall in U.S. consumer spending, got little relief from news that American manufacturing grew at its fastest pace last month since April 2006. European markets fell in early trade.

Investors were nervous that a report on U.S. unemployment due Friday will confirm that job losses continue to swell, suggesting an anemic economic recovery. U.S. unemployment hit a 26-year high of 9.8 percent in September.

Today's interest rate hike in Australia failed to inspire the same jubilation among investors as last month's. The October rate increase, the first in a major economy since the onset of the crisis, was greeted as evidence of an improving world economy.

Hong Kong's Hang Seng led Asia's losses, falling 380.13, or 1.8 percent, to 21,240.06 while South Korea's Kospi was down 0.6 percent at 1,549.92. Japan's market was closed for a holiday.

Elsewhere, Australia's S&P/ASX 200 closed down 0.2 percent and Taiwan's market lost 0.2 percent. China's Shanghai index bucked the trend, gaining 1.2 percent to 3,114.23 with sentiment still boosted by a weekend report manufacturing expanded for an eighth straight month in October.

As trading got under way in Europe, Britain's FTSE 100 was off 1.3 percent, Germany's DAX lost 1.4 percent and France's CAC 40 fell 1.5 percent. Stock futures pointed to losses today on Wall Street. Dow futures were down 49, or 0.5 percent, at 9,686 and S&P Futures dropped 5.9, or 0.6 percent, to 1,033.20.

Yesterday, the Dow rose 76.71, or 0.8 percent, to 9,789.44, its fourth gain in 10 days -- boosted by the Institute of Supply Management's report on manufacturing and other economic figures. The broader Standard & Poor's 500 index rose 6.69, or 0.7 percent, to 1,042.88, and the Nasdaq composite index rose 4.09, or 0.2 percent, to 2,049.20.

Oil prices hovered near $78 a barrel in Asia amid hopes of improved crude demand. Benchmark crude for December delivery was off 36 cents at $77.75 a barrel. The contract rose $1.13 to settle at $78.13 yesterday.

In currencies, the dollar fell to 89.92 yen from 90.29 yen. The euro fell to $1.4739 from $1.4764.

-- The Associated Press