LONDON (AP) — Uncertainty over the U.S. Federal Reserve's next step and a looming U.S. budget showdown kept a lid on stock market Tuesday.
Although Asian indexes closed lower, stocks in Europe and the U.S. managed to eke out gains despite some underwhelming U.S. economic data.
In Europe, the FTSE 100 index of leading British shares closed up 0.2 percent at 6,571.46 while Germany's DAX rose 0.3 percent to 8,664.60. The CAC-40 in France ended 0.6 percent higher at 4,195.61.
In the U.S., the Dow Jones industrial average was up 0.1 percent at 15,416 while the broader S&P 500 index rose the same rate to 1,703.
Attention in the markets is very much on the U.S. this week. Investors will be monitoring a run of economic data and comments from Fed officials to see when the central bank will begin to reduce its monetary stimulus.
Last week's unexpected decision by the Fed to refrain from reducing its $85 billion in monthly asset purchases was initially cheered, particularly in stock and commodity markets, which have grown used to the stimulus over the past few years.
The Fed is, however, still expected to scale back its purchases at one of its upcoming meetings, so "tapering" isn't off the table. Economic indicators and Fed policymakers' comments will likely continue to drive sentiment.
Tuesday's data did little to cement expectations of when the Fed may act. A house price report from S&P/Case-Shiller and a consumer confidence survey from the Conference Board were a little softer than expected.
The approaching budget battle between the White House and Republican lawmakers has also thrown an element of uncertainty into markets. The government will reach its borrowing limit, or debt ceiling, by Oct. 1. If Congress doesn't raise that limit, the government won't be able to pay all its bills.
Republicans are demanding that any increase must result in expenditure cuts of an equal amount. President Barack Obama is demanding a debt limit increase with no conditions attached.
"The re-emergence of debt ceiling concerns, along with muddled central bank guidance, has helped to inspire caution rather than risk," said Brenda Kelly, senior market strategist at IG.
Earlier in Asia, Japan's Nikkei 225 fell 0.1 percent to close at 14,732.61. Hong Kong's Hang Seng dropped 0.8 percent to 23,179.04. Australia's S&P/ASX 200 shed 0.4 percent to 5,234.20. South Korea's Kospi fell 0.1 percent to 2,007.10.
Trading elsewhere was muted. Among currencies, the euro was down 0.1 percent at $1.3485 while the dollar was flat at 98.80 yen. In the oil markets, a barrel of benchmark New York crude was trading 91 cents lower at $102.68.