LONDON — Stocks eked out modest gains Wednesday after a lackluster few days, though investors remained skeptical that European leaders would agree any meaningful debt crisis solutions at their summit later this week.
With German Chancellor Angela Merkel continuing to voice her opposition to the prospect of jointly-issued eurobonds, investors doubt anything substantial will emerge at the two-day summit in Brussels that starts Thursday.
Many experts say eurobonds are the answer to the eurozone's problems as they would allow help lower indebted countries' borrowing costs, easing the risk they may need a bailout. But Germany is reluctant to expose itself to new potential costs and is concerned that eurobonds may ease the pressure on countries like Greece and Spain to reform their economies.
"A few brave souls have edged into the market, but enthusiasm is distinctly lacking, as most traders opt to hold their ground and wait to see what decisions, if any, emerge from the eurozone summit," said Chris Beauchamp, market analyst at IG Index. "In a way, it would be hard to lower expectations any further, since we have been here many times before, but there is a sense that this time the fallout from any apparent lack of progress will be severe."
The run-up to this summit is distinctly different to previous ones over the past two years when investors got ahead of themselves, anticipating game-changing conclusions, only to be disappointed. Though little is expected from the summit, some traders think the European Central Bank may take more aggressive action to ease the crisis and that has helped shore up stocks.
"If the eurozone meeting does not bear any fruit, there will be anticipation of coordinated central bank intervention and a slashing of ECB rates on July 5," said Mike McCudden, head of derivatives at Interactive Investor.
McCudden said a third round of super-cheap long-term loans from the ECB may be in the cards. The second round last December helped stabilize financial markets in the early part of this year and the hope would be that a repeat performance may occur during the summer months.
In Europe, Germany's DAX was up 0.5 percent at 6,167 while the CAC-40 in France rose 0.7 percent to 3,031. The FTSE 100 index of leading British shares was 0.7 percent higher at 5,488.
The euro was a little lower though at $1.2476.
Wall Street opened modestly higher after fairly-upbeat U.S. durable goods orders figures for May — they rose a monthly 1.1 percent after two months of declines.
"A better-than-expected manufacturing report but one month doesn't make a trend," said Jennifer Lee, an economist at BMO Capital Markets.
The Dow Jones industrial average was up 0.4 percent at 12,575 while the broader S&P 500 index rose 0.5 percent to 1,326.
Earlier in Asia, Japan's Nikkei 225 gained 0.8 percent to close at 8,730.49 while Hong Kong's Hang Seng rose 1 percent to 19,176.95 and South Korea's Kospi was nearly unchanged at 1,817.65.
Mainland Chinese shares were mixed. The Shanghai Composite Index fell for a sixth straight trading day, down 0.2 percent to 2,216.93. The Shenzhen Composite Index rose marginally to 918.38.
Oil prices headed back toward the $80 a barrel mark as stocks recovered — benchmark oil for August delivery was up 37 cents at $79.73 a barrel in electronic trading on the New York Mercantile Exchange.
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Pamela Sampson in Bangkok contributed to this report.
Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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