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Asian stock markets slump as dismal German debt auction spooks investors
BANGKOK (AP) ' Asian stock markets were mostly lower Thursday amid mixed economic data out of the U.S. and fears that the German economy ' Europe's strongest ' may be succumbing to the continent's debt crisis.
Japan's Nikkei 225, reopening after a one-day public holiday, fell 1.5 percent at 8,186.58. Hong Kong's Hang Seng index lost 0.7 percent at 17,730.57. Benchmarks in New Zealand, Malaysia and Singapore also fell.
But South Korea's Kospi gained 0.3 percent at 1,788.51 and Australia's S&P ASX 200 was 0.3 percent higher to 4,064.40.
Global markets were spooked Wednesday by the poor results at an auction of German debt, which met with only 60 percent demand. Germany's Financial Agency blamed "the extraordinarily nervous market environment."
The weak buying suggests that Europe's crisis might be infecting strong nations that are crucial to keeping the euro currency afloat. Germany bears much of the burden of bailing out weaker neighbors such as Greece and Portugal.
Analysts at Credit Agricole CIB said the eurozone debt crisis remains "the major concern for the markets" and that the German debt auction signals the spread of "the contagion to hard core economies" in the region.
Borrowing costs for Italy and Spain rose from levels that already were considered dangerously high. Europe lacks the resources to bail out those countries, its third- and fourth-biggest economies.
In the U.S., the government released a mixed batch of economic reports. Slightly more people applied for unemployment benefits last week, a sign that layoffs continue.
Consumer spending was sluggish but incomes rose a bit more than expected. Orders for long-lasting manufactured products fell for a second month and business investment dropped off.
The Dow fell 2.1 percent to close at 11,257.55. The Standard & Poor's 500 index fell 2.2 percent to 1,161.79. The Nasdaq fell 2.4 percent to 2,460.08.
U.S. markets will be closed on Thursday for the Thanksgiving holiday and will have shortened hours on Friday.