World markets end July by cutting losses for year

July will be remembered as a good month for shares, with most world markets erasing the losses that had taken indexes below levels at the beginning of the year.

On Wall Street, blue-chip stocks overcame an early 120-point decline to finish down by just one point, capping a stellar month of gains and bucking a slowdown in second-quarter economic growth.

The Dow Jones Industrial Average closed down 1.22 points, or 0.01%, to finish at 10,465.94. That puts the measure up 7.1% on the month – the first positive month for US stocks since April and the best month since last July, when stocks were in the midst of a 70% bull run.

The gains have come as a strong set of second-quarter earnings provided a big source of encouragement to investors after they spent much of May and June fretting over the impact of euro-zone debt troubles and China's efforts to put the brakes on its growth.

The S&P 500 index rose 0.01% on Friday to finish at 1101.59, just above the psychologically important 1100 level. It's up 6.9% for July. The Nasdaq Composite, meanwhile, gained 0.13% to end at 2254.70, also up 6.9% for the month.

Other markets: Europe, Asia up

European shares ended lower, as disappointment over the slowdown in US economic growth prevailed and offset earnings-related gains from French corporate giants Alcatel-Lucent and EADS.

The Stoxx Europe 600 index fell 0.4% to 255.35 points. Still, July was good for European equities, with the index posting a 4.9% monthly gain.

The FTSE 100 index fell 1.05% to 5,258.02. Germany's DAX index bucked the negative trend to end up 0.2% at 6147.97, led higher by shares of Adidas, which rose 2.1%. The DAX gained 3% in July. France's CAC-40 index ended down 0.2% at 3643.14, but posted a monthly gain of 5.8%.

In Asia, markets ended a solid month on a sour note. Japanese shares fell as weak economic indicators and a strong yen dragged down most exporters despite upbeat results from blue-chips such as Sony.

The Nikkei Stock Average fell 1.6% to 9537.30, leaving it up 1.6% for July. Losses in other Asian markets were more modest.

China's Shanghai Composite shed 0.4% to 2637.50, ending a month that saw it surge 10%, its best monthly showing in a year.

Hong Kong's Hang Seng Index gave up 0.3% to 21,029.81, leaving it with a 4.5% gain for July. Australia's S&P/ASX 200 lost 0.7% to 4493.48, a 3.6% monthly gain.

Korea's Kospi declined 0.7% to 1759.33, up 3.6% for the month, and India's Sensex lost 0.7% to 17868.29, up 1.1% for the month.

Commodities: Oil, gold up

Crude futures settled higher, rallying from early losses on optimistic economic data that countered a report showing slower US growth.

Light, sweet crude for September delivery rose 59USc, or 0.8%, to settle at $US78.95 a barrel in New York, swinging from as low as $US76.83 in early trading.

Brent crude on the ICE futures exchange settled up 59USc at $US78.18 a barrel.

Gold futures recouped much of the week's losses as investors moved back into the metal.

The most actively traded gold contract, for December delivery, rose $US12.70, or 1.1%, to settle at $US1183.90 an ounce in New York. It fell 0.7% on the week but ended well up from three-month lows of below $1160 hit on Wednesday.

August gold rose $US13.30, or 1.1%, to $US1181.70, falling 0.5% for the week and down 5.1% for July.

Currencies: Pound up, euro down

The UK pound touched a five-month high, bolstered by buying against the euro in unsettled market conditions.

The yen advanced early against both the dollar and the euro as concerns about global economic growth remained a dominant theme.

The euro weakened to $US1.3050, from $US1.3078 late on Thursday in New York. The euro also weakened to ¥112.75 from ¥113.57.

The dollar weakened to ¥86.40 from ¥86.84, after punching through ¥86 to as low as ¥85.95, the weakest points since November 27.