Economy

World stocks lag after US data, oil rises on Iraq

LONDON (AP) — World stock markets were sluggish on Thursday after new data showed retail sales grew less than expected in the U.S. in May, while oil prices rose amid escalating violence in Iraq.

Sentiment has been subdued since the World Bank cut its 2014 growth forecast Tuesday, citing a harsh American winter and the tensions in Ukraine. With many stock indexes hitting record highs this week, that prompted investors to become more cautious.

That tone continued Thursday after official U.S. data showed consumer spending rose 0.3 percent last month, short of the 0.4 percent markets had been expecting. Meanwhile, weekly applications for unemployment benefits rose.

In Europe, Britain's FTSE 100 rose barely 0.1 percent to close at 6,843.11 while Germany's DAX fell 0.1 percent to 9,938.70. France's CAC 40 ended flat at 4,554.40. On Wall Street, the Dow Jones was 0.3 percent lower at 16,798.25 and the S&P 500 down the same rate at 1,938.54.

The rise in oil prices helped keep stock traders in check, as higher energy prices can increase costs for companies and transportation. The U.S. benchmark oil contract for July delivery jumped $1.44 to $105.84 a barrel on the New York Mercantile Exchange as Al-Qaida-inspired militants threatened to take over Iraq's north after gaining control of Iraq's No. 2 city earlier this week.

Earlier in Asia, Japan's Nikkei 225, the regional heavyweight, declined 0.6 percent to 14,973.53. The index has gained 5.5 percent in the past month. South Korea's Kospi lost 0.2 percent to 2,011.65 following its central bank's widely expected decision to leave its policy rate unchanged.

Hong Kong's Hang Seng dipped 0.4 percent and Australia's S&P/ASX shed 0.5 percent. Stocks in mainland China and Indonesia also finished lower. The New Zealand dollar jumped to $0.8663 from $0.8612 late Wednesday after the country's central bank raised its benchmark lending rate by a quarter point to 3.25 percent as it tries to dampen increases in house prices.

In currencies, the euro rose 0.2 percent to $1.3553 and the dollar fell 0.2 percent to 101.83 yen.

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