World Markets up Modestly as Alcoa Beats Forecasts

A currency dealer monitors the Tokyo Foreign Exchange Market in Tokyo, Thursday, July 9, 2009. In currencies, the dollar was trading at 93.23 yen Thursday morning. (AP Photo/Koji Sasahara)

(AP)

World stock markets modestly rose modestly Thursday after aluminum company Alcoa Inc. kicked off the second quarter earnings reporting season with a smaller than anticipated loss, stoking hopes that businesses may have seen off the worst of the recession.

In Europe, the FTSE 100 index of leading British shares was up 27.53 points, or 0.7 percent, at 4,167.76 while Germany's DAX rose 61.50 points, or 1.3 percent, at 4,634.15. The CAC-40 in France was 24.25 points, or 0.8 percent, to 3,033.96.

Earlier, Asian stocks turned in a shaky performance, with Japan's market notching its seventh straight loss after a spike in the value of the yen against the dollar. At one stage on Wednesday, the dollar had slumped around 3 yen to a near five-month low of 91.81 yen.

The Japanese currency has been a big winner amid the economic uncertainty as it is widely considered a barometer of risk appetite in the markets in general — when investors are pessimistic, the yen gains a lot of support as it is considered a safe haven currency.

Key over the coming days and even weeks could be the second-quarter earnings reporting season as it will provide clues about whether companies have already seen the worst of the recession or whether they are still struggling in the first synchronized global economic downturn since the Second World War.

Alcoa was the first Dow constituent to report in an after-hours statement Wednesday.

Its loss of $454 million was narrower than analysts expected, and company executives attributed that outcome to efforts to slash costs and raise cash. They said some aluminum markets showed signs of improvement, but reiterated a forecast that worldwide aluminum consumption will shrink 7 percent this year amid the global recession.

The markets greeted the statement with cautious optimism and on Wall Street the prospects for the coming session were encouraging. Dow futures rose 56 points, or 0.7 percent, to 8,172 while the broader Standard & Poor's 500 futures were up 7.3 points, or 0.8 percent, to 881.