European stocks mixed to lower as U.S. worries persist; Dax down 0.09%

European stocks were mixed to lower on Tuesday, as sustained concerns over the handling of U.S. budget negotiations and the possibility of a U.S. default continued to weigh on investor confidence. 

During European morning trade, the EURO STOXX 50 inched up 0.06%, France’s CAC 40 fell 0.11%, while Germany’s DAX 30 slipped 0.09%. 

President Barack Obama repeated Monday that he is willing to negotiate with congressional Republicans on a range of topics, including healthcare and energy policy, but only after the government is reopened.

Mr. Obama also called on Congress to raise the government borrowing limit ahead of the October 17 deadline, the date which the Treasury Department has estimated the U.S. could risk a default. 

Meanwhile, official data released Tuesday showed that Germany's trade surplus widened more-than-expected in August, rising to EUR15.6 billion from an upwardly revised surplus of EUR15 billion the previous month. Analysts had expected the trade surplus to widen to EUR15.1 billion in August. 

Financial stocks were mixed, as BNP Paribas slipped 0.17% and Societe Generale inched up 0.03% in France, while Deutsche Bank added 0.14% and Commerzbank declined 0.83% in Germany. 

However, among peripheral lenders, Spanish banks BBVA and Banco Santander climbed 0.48% and 0.79% respectively, while Italy's Unicredit and Intesa Sanpaolo advanced 0.56% and 0.99%. 

Elsewhere, Alcatel-Lucent rallied 1.87% after the telecoms equipment maker announced plans to reduce its staff by 10,000 as part of a strategy to save EUR1 billion in costs. 

On the downside, Novartis shed 0.66% after JPMorgan Chase cut its recommendation on the drugmaker to "neutral" from "overweight". 

In London, commodity-heavy FTSE 100 shed 0.30%, weighed by losses in mining stocks. 

Shares in Polymetal and Fresnillo lost 0.89% and 1.18% respectively, while rival companies Glencore Xstrata and BHP Billiton plummeted 1.51% and 1.47%. 

Financial stocks were also on the downside, with the Royal Bank of Scotland retreating 0.40% and Barclays down 0.48%, while HSBC Holdings and Lloyds Banking slid 0.21% and 0.42%. 

In the U.S., equity markets pointed to a steady to higher open. The Dow Jones Industrial Average futures pointed to a 0.06% gain, S&P 500 futures signaled a 0.05% rise, while the Nasdaq 100 futures indicated a 0.12% increase. 

Later in the day, Germany was to release official data on factory orders.

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Gold little changed near 1-week high as U.S. debt woes remain in focus

Gold futures were little changed near a one-week high on Tuesday, as ongoing uncertainty over the U.S. government shutdown and the upcoming debt ceiling debate continued to support the precious metal.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,326.50 a troy ounce during European morning hours, up 0.1%. 

Prices traded in range between USD1,320.90 a troy ounce, the daily low and a session high of USD1,328.10 a troy ounce. 

The December contract ended 1.16% higher on Monday to settle at USD1,325.10 a troy ounce, after climbing to a session high of USD1,328.60, the strongest level since October 1. 

Gold futures were likely to find support at USD1,278.20 a troy ounce, the low from October 2 and resistance at USD1,337.80, the high from October 1.

Investors continued to monitor negotiations over a U.S. budget impasse that has kept the federal government shut down since October 1.

Markets were also mulling over how the political deadlock in Washington will impact on negotiations to raise the U.S. debt ceiling, which the U.S. Treasury Department has estimated will be reached by October 17.

President Barack Obama repeated Monday that he is willing to negotiate with congressional Republicans on a range of topics, including healthcare and energy policy, but only after the government is reopened.

Republican House Speaker John Boehner said Sunday the House will not support bills to fully reopen the government or increase the U.S. debt ceiling unless Democrats agree to talks about spending cuts.

Meanwhile, delays in U.S. economic data releases fuelled speculation that the Federal Reserve will hold off on any move to scale back its stimulus program.

Gold traders will be looking ahead to Wednesday’s minutes of the Fed’s most recent policy-setting meeting for further clues on the direction of U.S. monetary policy.

The Fed took markets by surprise last month with a decision to keep its stimulus program on track, saying it wanted to see more evidence of a sustained economic recovery before tapering.

The central bank is scheduled to meet October 29-30 to review the economy and assess policy.

Elsewhere on the Comex, silver for December delivery inched up 0.1% to trade at USD22.40 a troy ounce, while copper for December delivery added 0.35% to trade at USD3.308 a pound.

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