LONDON — Stock markets mostly fell Monday as investors took a breather following last week's big gains, which sent many of the world's major indexes above where they were when Lehman Brothers collapsed in September 2008.
In Europe, the FTSE 100 index of leading British shares closed down 25.39 points, or 0.4 percent, at 5,849.96 while Germany's DAX fell 3.7 points, or 0.1 percent, to 6,750.50. The CAC-40 in France ended 3.03 points, or 0.1 percent, lower at 3,913.70.
In the U.S., the Dow Jones industrial average was down 49.95 points, or 0.4 percent, at 11,394.13 around midday New York time, while the broader Standard & Poor's 500 index fell 5.1 points, or 0.4 percent, to 1,220.75.
The retreat in Europe and on Wall Street had been widely predicted after last week's heady gains, when sentiment was buoyed by the Federal Reserve's decision to pump another $600 billion into the U.S. economy in its latest attempt to shore up the recovery and get the unemployment rate down.
"It is nothing too dramatic as of yet, and for now it just looks like a bout of profit-taking following the sharp gains seen last week as a result of the statement from the Fed," said David Jones, chief market strategist at IG Index.
Last week, the Dow spiked 2.8 percent while the S&P 500 closed up 3.5 percent — both hit their highest levels since September 2008. In Europe the FTSE in London rose 3.5 percent to a 29-month high and in Asia, Japan's Nikkei index surged 4.6 percent and Hong Kong's Hang Seng climbed 7.7 percent.
The main point of interest in the currency markets was Ireland's continuing debt difficulties as investors fretted about the ability of the government to push through more spending cuts next month after the main opposition party said it would not be backing another dose of austerity.
"Grabbing the headlines once again today is the worry that despite the best efforts of the Irish government to bail out its ailing financial sector, the cost will overburden the government, forcing it to take EU assistance," said Andrew Wilkinson, senior market analyst at Interactive Brokers.
The differential between Irish and German 10-year bond yields has widened to record levels, in a sign that investors are beginning to doubt the ability of the Irish government to deal with its debts without outside help, most notably its partners in the eurozone. EU monetary affairs commissioner Olli Rehn is scheduled to meet Ireland's finance minister Brian Lenihan in Dublin later.
By late afternoon London time, the euro was down 1 percent on the day at $1.39.
While Ireland's debt difficulties are seemingly becoming more acute, concerns over Greece have diminished somewhat after the government led by Prime Minister George Papandreou held its own in local elections — helping to shore up market confidence that the austerity measures will continue for a while yet.
Currency traders will also be monitoring any comments that may have a bearing on the two-day meeting of the leaders of the Group of 20 industrial and developing nations in Seoul later in the week. Last week's move by the Fed has caused a degree of concern particularly in China and Germany, who also seem reluctant to back a U.S. plan to target current account surpluses to 4 percent of GDP.
Earlier in Asia, stocks outperformed their counterparts in Europe as investors responded to the better-than-anticipated U.S. jobs report for October, with Japan's Nikkei doing particularly well, closing up 1.1 percent at 9,732.92. South Korea's Kospi closed up 0.2 percent at 1,942.41. Hong Kong's Hang Seng rose 0.4 percent to close at 24,964.37.Comment on this story
In China, the benchmark Shanghai Composite Index gained 0.9 percent to 3,159.51, to hit its highest close since April while the Shenzhen Composite Index for China's smaller, second exchange gained 1.8 percent to 1,376.29.
Bucking the trend, Australia's S&P/ASX 200 slipped 0.5 percent to 4,778.4.
Benchmark oil for December delivery was down 77 cents at $86.08 a barrel in electronic trading on the New York Mercantile Exchange. The contract had risen 36 cents to settle at $86.85 on Friday.
Pamela Sampson in Bangkok contributed to this report.