LONDON (AP) -- World stock markets ended mixed on Thursday after President-elect Barack Obama made an urgent pitch to Congress to back his plan to resuscitate the U.S. economy.While Asian and European markets ended in negative territory, broad U.S. stock indexes posted gains, as did most markets in Latin America.
Though Obama warned that the economic situation would likely get worse before it gets better, he said his plan to cut taxes and pump billions into the U.S. economy would help limit the depth and length of the recession. It was his highest-profile pitch for the plan, which is expected to total nearly $800 million.
"The message is just going down well (in the markets)," said Howard Wheeldon, senior strategist at BGC Partners in London."There is a belief that there's something about this man and something about this plan," he added.
Those hopes helped European markets erase most of their earlier losses, which had been generated by mounting concerns about global economic growth as leading U.S. retailers revealed poor sales figures.
The FTSE 100 index of leading British shares closed down only 2.14 points at 4,505.37 while Germany's DAX slipped 57.56 points, or 1.2 percent, to 4,879.91, also off its session lows. The CAC-40 in France was 21.76, or 0.7 percent, down at 3,324.33.
U.S. stocks ended mostly higher, also boosted by an announced deal that would help prevent more mortgage foreclosures. Democratic lawmakers reached an agreement with Citigroup Inc. on a plan to let bankruptcy judges alter home loans in an effort to prevent foreclosures.
The Dow Jones industrial average fell 27.24 points, or 0.31 percent, to 8,742.46, but broader stock indicators advanced. The Standard & Poor's 500 index rose 3.08, or 0.34 percent, to 909.73, and the Nasdaq composite index rose 17.95, or 1.12 percent, to 1,617.01.
Nevertheless, stocks remain on the defensive following a healthy rally in the run-up to the 2008 year-end and the early sessions of 2009, as investors grapple with grim economic news.
Bad news was the story of the day earlier Thursday following a raft of dismal retail sales reports in the U.S. Among the many retailers that reported steep sales declines were Sears Holdings Corp., which operates Kmart and Sears stores, luxury retailer Saks Inc., Gap Inc., and Abercrombie & Fitch Co. But the biggest surprise came from Wal-Mart, the world's largest retailer, which posted a smaller sales gain than had been expected by Wall Street and cut its fourth-quarter earnings outlook.
In Latin America, Brazil's Ibovespa index resumed its 2009 rally, ending up 2.9 percent at 41,991. On Wednesday the Sao Paulo market dropped 3.5 percent, snapping a six-session winning streak.
Elsewhere in the region, Argentina's Merval added 2.2 percent to end at 1,192 and Chile's IPSA finished up 0.3 percent at 2,486. In Mexico, where the economy is closely bound to the U.S., the IPC index lost 0.7 percent to 21,955.
Earlier, every major market in Asia fell, marking an end to a New Year's rally.
Stock market analysts said there's been a noticeable change in market sentiment over the last 24 hours or so as investors took heed of the warnings and the likelihood that Friday's closely watched U.S. non-farm payrolls data for December may be particularly grim.
Neil Mackinnon, chief economist at ECU Group, said the reaction to Friday's jobs data will be key to see if the markets can soldier on.
"If it's a bad report and equities finish on a positive tone, that will be a very encouraging sign for markets, but if it's really bad and equity markets slump, it will be challenging for markets for the rest of the quarter," he said.
Earlier in Asia, Tokyo's Nikkei 225 stock average lost 362.82, or 3.9 percent, to 8,876.42, snapping a seven-day winning streak as the yen traded higher. Hong Kong's Hang Seng Index fell 571.55 points, or 3.8 percent, to 14,415.91.
South Korea's Kospi shed 1.8 percent, while Australia's benchmark dropped 2.3 percent and Taiwan's key index lost 5.3 percent. India's market, which plunged Wednesday after the chairman of major outsourcing company Satyam Computer admitted doctoring the firm's accounts for several years, was closed for a holiday.
In the oil market, light, sweet crude for February delivery fell 93 cents to settle at $41.70 a barrel on the New York Mercantile Exchange, a second day of declines after the U.S. government released more disheartening economic data and another inventory report suggested further erosion in energy demand. On Wednesday, prices tumbled more than 12 percent in the largest single-day percentage decline since September 2001.
The dollar, meanwhile, fell across the board after the Bank of England cut its key interest rate to a record low, but not as low as some traders expected. The British central bank cut its rate by half a percentage point to 1.5 percent, the lowest level in the bank's 315-year history. The British economy has been battered by a housing crisis and a string of failed retailers.
The euro rose to $1.3725 in late afternoon trading in New York from $1.3614 late Wednesday, while the British pound climbed to $1.5228 from $1.5132. The dollar also fell to 91.40 Japanese yen from 92.65 late Wednesday, and dropped to 1.0930 Swiss francs from 1.1026.
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