European stocks struggle amid mounting global woes

European stocks struggled Wednesday, as investors fretted over global gloom linked to the eurozone crisis and poor US earnings, but sentiment was partly boosted by a vast Spanish austerity package. London's FTSE 100 index of top companies slid 0.44 percent to 5,638.97 points and in Paris the CAC 40 fell 0.61 percent to 3,155.91, but Frankfurt's DAX 30 index eked out a 0.03-percent gain to stand at 6,440.18 points. Madrid bounced into positive territory as dealers welcomed the Spanish government's vast 65-billion-euro austerity package that is aimed at staving off bankruptcy. The nation's IBEX 35 index rose 0.31 percent to 6,748.1 points. However, Italy's stock market fell on persistent worries that debt-laden Rome may have to tap a regional rescue fund. The FTSE Mib index was down 0.51 percent at 13,797.24 points. "Global growth storm clouds continue to gather," said dealer Jonathan Sudaria at trading group Capital Spreads. The euro meanwhile clawed its way back to $1.2278. That compared with $1.2251 late in New York on Tuesday, when it had slumped to $1.2235 -- the lowest point since July 1, 2010. European share prices had risen on Tuesday, but lost some of their shine as investors cautiously approved a eurozone deal to help Spain and shrugged off weak Chinese data. "Despite a positive close in Europe yesterday, the rare optimism provided by eurozone bureaucrats proved fleeting as sentiment turned negative early in the US session," added Sudaria. "The US indices gave up early gains as yet more lacklustre corporate results cast a disappointing picture for the rest of the earnings season and that pessimistic view is set to weigh." Wall Street had dived Tuesday as investors digested the weak company earnings outlook, disappointing Chinese trade data and deep-rooted concerns about this week's eurozone deal to help support Spain. "It's risk-off time once again as the latest batch of US earnings brought home the impact of depleted confidence and a slowing global economy," added Mike McCudden, head of derivatives at Interactive Investor. "This will no doubt usher in yet another round of quantitative easing chatter but in the face of continued eurozone woe, with leaders evidently not in a hurry to get the job done, investors will feel safer investing their cash under the mattress." Investors remain sceptical about this week's Spanish deal, which will channel 30 billion euros ($37 billion) this month to its banks and give Madrid an extension to a deadline to cut its public deficit. Market sentiment was also battered Tuesday after Italian Prime Minister Mario Monti said that Rome may one day ask for the eurozone rescue fund to intervene in its bond market in order to ease his country's borrowing costs. "It is very difficult to say that Italy will never need help from one fund or another and caution compels me not to talk about such things," Monti said, having previously insisted that Rome did not need such an intervention. Asian markets diverged earlier on Wednesday as investors paused for breath folowing recent volatile trade. Hong Kong added 0.12 percent and Shanghai gained 0.51 percent, while Tokyo pulled 0.08 percent lower and Sydney lost 0.04 percent in value. On Tuesday, Wall Street's Dow Jones Industrial Average slid 0.65 percent after a slump in confidence registered by a US small-business survey, and on the back of warnings on the corporate front. The National Federation of Independent Business said its small-business optimism index fell in June to its lowest reading since last October. Concerns about China also weighed on markets as investors awaited more key data later in the week, including second-quarter GDP, to gauge how fast the world's second-largest economy is slowing. Dealers were also looking to the release of minutes from a US Federal Reserve meeting due Thursday.