LONDON (AP) -- European and U.S. stock markets fell Tuesday as investors decided to cash in on two weeks of gains after mixed corporate earnings and a survey pointing to waning U.S. consumer confidence.
In Europe, Germany's DAX closed down 76.81 points, or 1.5 percent, at 5,174.79 while France's CAC-40 fell 41.39 points, or 1.2 percent, to 3,330.97. The FTSE 100 index of leading British shares was down 57.29 points, or 1.3 percent, 4,528.84. The drop in the FTSE ended a record winning streak of 11 days.
U.S. stocks were down too with the Dow Jones industrial average down 77.84 points, or 0.9 percent, at 9,030.67 around midday New York time while the broader Standard & Poor's 500 index fell 10.26 points, or 1 percent, to 971.92.
Analysts said it was unsurprising that stocks are shedding some gains as investors book profits following a two-week rally that has sent many of the world's major indexes to their highest levels this year.
"It is said that bull markets climb a wall of worry -- and after the steep gains seen over the past couple of weeks, stock markets were maybe looking for an excuse to ease back and relax a little bit," said David Jones, chief market strategist at IG Index.
Stocks have rallied strongly over the last couple of weeks after better than expected U.S. earnings pushed many of the world's leading indexes to 2009 highs amid hopes that the worst of the recession was over. Equities usually rally around 6-9 months before actual economic growth emerges.
While most of the focus recently has centered on U.S. earnings, the European reporting season has kicked into gear this week, providing investors with crucial insight about whether the recession is easing as much as it apparently is in the U.S.
So far, the evidence in Europe has been mixed.
Deutsche Bank AG fell over 10 percent, making it the biggest faller on Germany's DAX, after it booked big credit loan losses despite a 67 percent rise in second quarter net profit. But EADS NV was near the top of the CAC-40 leaderboard -- rising by over 2 percent -- after it said it still plans to deliver as many Airbus planes as last year alongside a 76 percent increase in second quarter net profit.
Meanwhile, BP PLC, Europe's second biggest oil company, saw its share price fall over 3 percent after in-line second quarter results prompted a bout of profit-taking -- BP has performed particularly well in the last month in the run-up to the results.
Earnings will continue to dominate sentiment in Europe over the rest of the week. Among other steelmaker Arcelor Mittal, carmaker Daimler AG, chemical company BASF SA, France Telecom SA and Royal Dutch Petroleum will report.
It's a quieter week in the U.S. though there will be interest in earnings from media company Time Warner Inc., Dow Chemical Co., Colgate-Palmolive Co, Walt Disney Co. and ExxonMobil Corp.
Disappointing U.S. consumer confidence news also weighed on the markets, even though the closely-watched S&P/Case-Schiller survey indicated that house prices in 20 major U.S. cities rose in May for the first time in three years.
The Conference Board said its main consumer confidence index fell for the second month running to 46.6 in July from 49.3 in June. Economists were expecting a far more modest decline to 49.
Without the support of the U.S. consumer, which accounts for around 70 percent of the U.S. economy and 20 percent of the global economy, any recovery will soon fizzle out.
"If the U.S. economy is going to recover quickly, people need to get down to the shopping malls," said David Buik, markets analyst at BGC Partners.
Earlier in Asia, most markets closed higher, though Tokyo's Nikkei 225 stock average fell a minuscule 1.4 points to 10,087.26. Hong Kong's Hang Seng outperformed its regional counterparts, closing up 372.92 points, or 1.8 percent, at 20,624.54.
Elsewhere in Asia, markets in Shanghai and Seoul recouped their losses to finish higher by 0.1 percent.
Australia's index gained 0.7 percent and India's Sensex was up 0.2 percent.
Oil prices fell in line with stocks, with benchmark crude for September delivery down $1.44 to $66.94 a barrel. Stock and oil prices have largely moved hand in glove over the last few months.
The dollar fell 1.2 percent to 94.03 yen, while the euro slipped 0.8 percent to $1.4134.
In recent weeks the dollar and stocks have moved in opposite directions. When shares have fallen, the dollar has tended to rise as it is widely considered a safe haven asset despite all the problems afflicting the U.S. economy. The yen is considered even more of a safe haven than the dollar, hence the U.S. currency's fall against it Tuesday.
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