(AP) BRUSSELS - European stocks slipped Wednesday as concern that the continent's debt crisis is infecting the world economy offset hopes the U.S. might unveil more stimulus measures.
While stocks opened initially up in Europe, the bad news from the continent quickly set in. Investors are nervously awaiting Greek elections on Sunday, when a party that's threatening to renege on the country's bailout terms could come away the big winner. That might force the country out the euro.
Attention is also focused on Spain, where borrowing costs rose to euro-era highs on Tuesday, increasing concerns that it could need a bailout. The country agreed last weekend to take a rescue package to help it shore up its banks, but investors worry the government may have trouble repaying the loans.
The debt crisis is not just rattling financial markets, but also affecting households and businesses by creating uncertainty over the future of the economy. The latest report from Eurostat, the EU statistics agency, showed industrial production in April among the 17 countries that use the euro slipped 0.8 percent. Analysts noted that even that poor showing is worse than it seems because a cold Spring pushed up energy demand.
"Each day brings us closer to the Greek elections, an event that might be seen in years to come as the moment when the single European currency truly began to fall apart," said Chris Beauchamp, a market analyst with IG Index. "It all remains up in the air, and it is this uncertainty that is holding markets in check."
In Europe, stocks initially eked out small gains on the back of comments by a Federal Reserve official in support of more measures to stimulate the economy. But they were quickly erased.
France's CAC-40 dropped 0.5 percent to 3,033, while the DAX in Germany fell the same rate to 6,129. The FTSE index of leading British shares moved down 0.1 percent to 5,469.
The euro was volatile, but moved up 0.4 percent to $1.2550.
The U.S. was set to open lower, with Dow futures down 4 points at 12,510 and S&P 500 futures 2 points lower at 1,318.10..
Earlier in Asia, stocks had an equally choppy session.
Japan's Nikkei 225 index gained 0.6 percent to close at 8,587.84, after machinery orders rose 5.7 percent to the highest level in four years, Kyodo reported.
South Korea's Kospi swung temporarily into negative territory in early trading before closing 0.2 percent higher at 1,859.32. Hong Kong's Hang Seng also briefly dipped before rising 0.8 percent to 18,026.52.
Australia's S&P/ASX 200 fell 0.2 percent to 4,063.80. Benchmarks in New Zealand and Singapore fell but Taiwan's rose.
Mainland Chinese shares rose on hopes authorities would bring in more economy-boosting measures. The benchmark Shanghai Composite Index added 1.3 percent to 2,318.92 while the smaller Shenzhen Composite Index gained 1.8 percent to 959.11. Shares in biotechnology, insurance and power-related companies led the gains.
Amid concerns for the economy, which drives down energy demand, benchmark oil for July delivery fell 6 cents to $82.26 per barrel in electronic trading on the New York Mercantile Exchange.