European stocks were higher Wednesday ahead of testimony from the Federal Reserve chief that could either ease market turmoil or add to it. Asian markets mostly fell in a spillover sell-off from the previous day's losses on Wall Street.
KEEPING SCORE: France's CAC 40 rose 1.9 percent to 4,072.37 and Germany's DAX added 1.8 percent to 9,036.53. Britain's FTSE 100 gained 0.9 percent to 5,682.14. Wall Street was set to rise after a losing streak. Dow futures were up 0.5 percent to 16,047.00. S&P 500 futures advanced 0.7 percent to 1,861.60.
FED SPEAK: Federal Reserve Chair Janet Yellen begins two days of congressional testimony Wednesday that is keenly awaited by markets. Since the Fed decided to raise its key interest rate from a record low in December, the U.S. economy has hit some turbulence. Lawmakers will likely have a lot of questions for Yellen about the future pace of rate hikes and the Fed's role in supporting the U.S. economy.
THE QUOTE: "Traders and investors want clarity on the macro-economic environment and, to a degree, we hope this can come from key corporate feedback and the top-dog central bankers," said Chris Weston, chief market strategist at IG in Melbourne, Australia. "Janet Yellen takes the stage in today's U.S. session to testify to the House Financial Services Committee and, while her comments will be pre-prepared, the market wants to make sense of how she sees the world," he said in a commentary.
BANK DOUBTS: Investors are questioning whether European banks such as Deutsche Bank have sufficient capital after a slump in its share price and a record annual loss. Despite assurances from the German bank, some analysts expect it will need to issue new shares to raise billions of dollars, which is likely to further depress its share price. Banks also face economic headwinds that could slow lending and hurt profits. Some are also exposed to the slump in oil prices via their loans to energy companies. The nerves in Europe have spread to banks worldwide. In Asia, Mizuho Financial was down 5.4 percent in Tokyo and ANZ fell 1.6 percent in Sydney.
ASIA'S DAY: Japan's Nikkei 225 sank 2.3 percent to 15,713.39 and is down about 11 percent in the past month. Australia's S&P/ASX 200 shed 1.2 percent to 4,775.70. Stock benchmarks also fell in Singapore, Indonesia, New Zealand and India but rose in Thailand and the Philippines. Markets are closed in China, Taiwan, Hong Kong and South Korea for Lunar New Year holidays. Hong Kong and Korea reopen on Thursday and China and Taiwan resume trading on Monday.
ENERGY: Brent crude, a benchmark for international oils, was up 61 cents at $30.93 a barrel in London. It fell $2.56, or 7.8 percent, to close at $30.32 the day before. It was about $60 a barrel a year ago and $109 two years ago. Benchmark U.S. crude was up 57 cents at $28.50 a barrel in electronic trading on the New York Mercantile Exchange. The futures contract dropped $1.75, or 5.6 percent, to close at $27.94 a barrel on Tuesday.
CURRENCIES: The euro fell to $1.1261 from $1.1289 the day before. The dollar fell to 114.88 yen from 114.95 yen.