Asian stocks rise after stronger US economic data

By YURI KAGEYAMA | July 14, 2011 | 11:29 PM EDT

TOKYO (AP) — Asian stocks markets posted moderate gains Friday as investors weighed positive economic indicators against a new warning on U.S. debt.

Japan's Nikkei 225 stock average gained 0.2 percent to 9,955.57, recovering slight losses with brokers largely on the sidelines. July 18 is a national holiday in Japan that celebrates the ocean.

Hong Kong's Hang Seng added 0.1 percent to 21,966.87 and South Korea's Kospi rose 0.5 percent to 2,140.97. Australia's S&P/ASX 200 fell 0.3 percent to 4,475.80.

Amid concerns about the U.S. government credit rating, investors had positive news about the American economy to counter that.

U.S. retail sales unexpectedly rose in June while weekly jobless claims dropped by a surprisingly large 22,000 to 405,000, helping European markets trim losses overnight.

Koji Takeuchi, senior economist at Mizuho Research Institute in Tokyo, said investors are watching for signs of a recovery in the U.S. economy and trying to guage if the government debt crisis in Europe will worsen.

"Basically, a wait-and-see attitude is prevailing," he said.

Meanwhile, credit rating agency Standard & Poor's said on Thursday that there is a 50 percent chance it will downgrade the U.S. government's credit rating within three months because of the congressional impasse over approving an increase in the debt ceiling. The rating agency said it is placing the United States on a credit watch.

The S&P action marked the second credit warning in the past two days. On Wednesday, Moody's Investors Service said it is reviewing the government's triple-A bond rating.

In the U.S., remarks by Federal Reserve Chairman Ben Bernanke that dimmed hopes for a third round of bond-buying dragged stocks lower. In a second day of testimony, Bernanke told lawmakers the Fed expects the economy to improve. He said the central bank would only step in with more economic stimulus if there is a significant downturn in the economy.

The Dow Jones industrial average fell 54.49, or 0.4 percent, to 12,437.12 and the Standard & Poor's 500 index fell 8.85 points, or 0.7 percent, to 1,308.87. The Nasdaq composite fell 34.25, or 1.2 percent, to 2,762.67.

Investors are also keeping a close watch on developments in Europe amid worries Italy and Spain would be dragged into the debt crisis that has already seen Greece, Ireland and Portugal bailed out.

Benchmark crude for August delivery was up 63 cents at $96.32 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $2.36 to settle at $95.69 on Thursday after Bernanke's comments.

In currencies, the euro was up 0.2 percent to $1.4176. The dollar fell 0.1 percent to 79.12 yen.