(AP) LONDON - Global markets trimmed earlier gains after the European Central Bank offered no new monetary stimulus on Wednesday, with its chief Mario Draghi saying it was the governments' turn to act to restore confidence in the 17-country eurozone.
The, though some had expected a rate cut. It also declined to offer more ultra-cheap 3-year loans to banks, as it did months ago to ease the crisis.
Instead, Draghi said there are some problems that monetary policy cannot solve even though "there is a sense of concern."
European leaders are under pressure to agree at a summit on June 28 new measures such as a banking union that can directly rescue banks, bypassing national governments. The cost of rescuing important banks risks overwhelming the public finances of some countries - it bankrupted Ireland and threatens to do the same with Spain.
Draghi, who last week warned that the eurozone's setup is not sustainable, called once again on the European leaders to offer a long-term vision of Europe over the next five to 10 years.
Investors who had hoped the ECB would announce more support, or at least signal its willingness to offer more stimulus in the future, took advantage of earlier stock gains to cash in.
Germany's DAX was up 0.9 percent to 6,023.90 while France's CAC-40 gained 1.2 percent to 3,023.11. Both indexes' gains had been twice as big earlier in the day. The euro also lost some of its earlier gains, rising only 0.1 percent to $1.2469.
The FTSE 100 in Britain, where markets were closed Monday and Tuesday for Jubilee celebrations, was up 1.1 percent at 5,315.25 by late morning.
Wall Street saw small gains on the open, with the Dow Jones industrial average up 0.7 percent to 12,214.76 and the S&P 500 adding 0.7 percent to 1,294.86.
Helping support markets was the hope that the Federal Reserve might sanction a new round of monetary stimulus, or "quantitative easing", in which the Fed buys Treasury bonds to drive interest rates lower, after economic indicators turned sharply lower in recent weeks.
Although a survey of the U.S. services sector showed a timid improvement on Tuesday, data on jobs growth and manufacturing last week signaled a sharp slowdown in the world's largest economy. The market hope is that the evidence is now strong enough for the Fed to take action.
Later in the day, traders will eye the U.S. Federal Reserve's so-called Beige Book, a survey of businesses across the United States and monitor Europe's debt crisis developments, in particularly any progress in fixing Spain's banking crisis.
Spain needs money to rescue ailing banks, but can currently only receive such aid from the EU in a government bailout package. Madrid adamantly wants to avoid such a solution, as it would mean fellow eurozone countries and the International Monetary Fund would be allowed to impose fiscal policies on the country.
The country's government would like to allow the EU bailout fund to give money directly to the banks. Several other countries support that option, as well as the European Commission and the European Central Bank, who are expected to propose such a measure at a summit on June 28. The commission offered the first details of more centralized banking supervision on Wednesday.
The lingering concern, however, is that creating a banking union with the power to bail out banks directly still faces the opposition of Germany and would take months, if not years, to become fully operational, as it would have to be approved by national parliaments throughout the eurozone.
While Spain's borrowing rates edged down on Wednesday, to 6.23 percent, they remain uncomfortably high, indicating investors are still worried about the country's financial future.
In Asia, Japan's Nikkei 225 rose 1.8 percent to close at 8,533.53.
Hong Kong's Hang Seng added 1.4 percent to 18,520.53. Australia's S&P/ASX 200 edged 0.3 percent up to 4,055.30, still buoyed by the Reserve Bank of Australia's decision Tuesday to cut interest rates by a quarter percentage point.
Markets in Singapore, Indonesia and Taiwan also moved higher, but those in mainland China fell. Markets in South Korea were closed for a public holiday.
Benchmark oil for July delivery was up 65 cents to $84.94 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose 31 cents to settle at $84.29 in New York on Tuesday.
In currencies, the dollar rose to 79.12 yen from 78.73 yen late Tuesday in New York.