US shares trade higher after a five-session losing runContinue reading the main story
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US shares have gained on Wednesday following a losing run of five sessions.
The Dow Jones index was up 0.7%, helped by strong results from the aluminium producer, Alcoa, which sparked a 6% jump in its shares.
European markets also moved higher on Wednesday, making a slight recovery from Tuesday's steep losses.
Frankfurt's Dax closed up 1%, while London's FTSE 100 and Paris's Cac 40 ended about 0.7% up.
Speaking about the recent losing run for US shares, Bruce Zaro, chief technical strategist at Delta Global Asset Management in Boston said: "I see it as normal for the market to take a break after its best first quarter since 1998. If that's the only blip we see, it was pretty shallow."Spain focus
Concerns remain about Spain, which faces borrowing costs of close to 6%, despite a slight fall on Wednesday.
The financial markets have apparently remembered that, by itself, the official solution to the sovereign debt problem (more and more austerity) makes the real economy problem even worse, at least in the short run”
There has also been further evidence of the hard economic times in Spain. Industrial output slumped 5.1% in February compared with a year earlier.
Madrid has introduced a raft of austerity measures in recent weeks in order to hit stringent deficit targets agreed with the EU, measures that restrict economic growth.
Ahead of an appearance in parliament when he is expected to give further details of the budget cuts, Prime Minister Mariano Rajoy said his country's situation was "difficult and complicated".
"The government's economic policies are tough and costly and will not produce results in the short term, but they are what we have to do in these moments."
Investors are concerned that with a shrinking economy and rising borrowing costs, Spain might need a bailout - despite the austerity measures, Spanish bond yields have risen sharply this year.
"If bond yields continue to rise we will soon see them reach the level that Greece, Ireland and Portugal needed bailout packages to come back from," said broker Jonathan Bristow at Valbury Capital.
However, European Central Bank (ECB) board member Joerg Asmussen said Spain's troubles had been overplayed by the markets.
"The political will is there, which makes me think that what is happening at the moment in the market does not reflect the fundamentals," he said.Bond auction
Similar concerns revolve around Italy, which is also struggling to lower its budget deficit amid a sluggish economy.
Just a few weeks ago the head of the IMF, Christine Lagarde, looked at Greece and declared "economic spring is in the air". Such bursts of optimism now seem foolishly premature”
The Italian government raised 11bn euros ($14.4bn; £9.1bn) on the money markets on Wednesday morning.
There was plenty of demand for the government bonds, some of which are to be be repaid in a year, some in three months.
But to borrow for one year the Italian government had to pay interest of 2.84%, up from 1.41% at a similar auction in mid-March.
Despite this, the Italian and Spanish stock markets both had a better day, gaining about 2%.
That follows Tuesday's heavy losses when Madrid lost 3% and Milan 5%.
There are rumours that the ECB is prepared to step in and buy Spanish and Italian bonds to help ease borrowing costs.
However, Mr Asmussen suggested any further intervention by the bank may not be forthcoming.
"The ECB has done its part, the ball is in the court of the governments," he said.'No guarantee'
In Asia, Japanese stocks fell for the seventh straight session as traders there reacted to fresh fears over the global economy.
Shares in electronics giant Sony fell 5% after it announced on Tuesday that annual losses would be a record $6.4bn (£4bn), double its previous forecast.
"Japan's consumer electronics industry is facing defeat," said Fujio Ando, senior managing director of Chibagin Asset Management.
"I don't think there is any guarantee that we will see the company return to black this year." he said.
The Nikkei 225 index shed 0.8%. Elsewhere, Hong Kong's Hang Seng and Australia's ASX 200 also dropped 1%.