European stock markets slipped Wednesday as stronger earnings from U.S. retailers Wal-Mart Stores Inc. and Home Depot Inc. failed to ease worries about slowing growth in China and elsewhere.

Investors also discounted a new round of deal making, after BHP Billiton’s hostile $38.5 billion all-cash takeover for Potash Corp. of Saskatchewan, which the Canadian company’s board rejected as “grossly inadequate.”

Oil prices fell back after a report showed U.S. crude supplies swelled last week, indicating demand for fuel may be weakening.

In midday European trading, France’s CAC-40 was down 0.4 percent at 3,648.87, Britain’s FTSE 100 was off 0.8 percent at 5,309.90 and Germany’s DAX was 0.2 percent lower at 6,192.66.

Stocks look to open little changed on Wall Street as investors step back a day after the market’s big rally Tuesday when the Dow Jones industrial average jumped 103 points on a slight improvement in the housing market and a big jump in industrial production.

There were no new big economic reports planned Wednesday giving investors little incentive to keep buying.

“There is a sense of an economic slowdown in China and the market is reacting to it belatedly,” said Francis Lun, general manager of Fulbright Securities Ltd. in Hong Kong.

Chinese shares gained in previous sessions on hopes that credit curbs would be eased in the wake of weaker economic indicators.

In New York overnight, the Dow Jones industrial average rose 103.84 points, or 1 percent, to 10,405.85, snapping a five-day losing streak on strong U.S. corporate earnings.

Wal-Mart, the world’s largest retailer, reported a 3.6 percent rise in second-quarter net income and raised its earnings guidance for the full year on robust demand in China, Brazil and Mexico.

Home Depot, the No. 1 U.S. home-improvement retailer, said its second-quarter net income rose 7 percent.

The Federal Reserve reported U.S. industrial production grew a robust 1.1 percent in July, helped by auto plants that kept operating when they normally shutter for summer renovations. It was a rare piece of positive news from the world’s biggest economy, which is struggling to maintain the momentum of recovery amid high unemployment.

Japan’s benchmark Nikkei 225 stock average gained 78.86 points, or 0.9 percent, to 9,240.54, South Korea’s Kospi added 0.4 percent to 1,761.99 and Australia’s S&P/ASX 200 was little changed at 4,474.90.

Markets in India, Singapore, Indonesia, Malaysia, Thailand and New Zealand also gained.

But the Shanghai Composite Index declined 0.1 percent to 2,668.25 and Hong Kong’s Hang Seng retreated 0.2 percent to 21,097.18 amid local concerns that Beijing’s credit curbs are causing growth to slow too rapidly.

In currencies, the euro fell to $1.2876 from $1.2880.

Benchmark crude for September delivery was down 53 cents at $75.26 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 53 cents to settle at $75.77 a barrel on Tuesday.

By GREG KELLER

Tags: Dow Jones Industrial, economic indicators, economy recovery, european economy, european stocks, financial markets, housing market, stock market, wall street

This entry was posted on Wednesday, August 18th, 2010 at 11:31 am and is filed under Dow Jones Industrial, Global Economy, Global Financial, Market Finance, european economy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.