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Global stocks recovered Tuesday after another big sell-off on Wall Street, as investors awaited a key speech from U.S. Federal Reserve chairman Ben Bernanke following a run of weak economic news.

Fears over the global economy have grown due to a raft of underwhelming economic indicators around the world, particularly out of the U.S., which culminated in last week’s much weaker than expected U.S. payrolls report for May.

As a result, there is speculation that the Fed may retain its super-loose monetary policy for much longer than initially thought.

The Fed’s current $600 billion monetary stimulus is due to expire this month and the prevailing view in the markets until recently was that the central bank would drop the program and possibly start raising interest rates by the end of this year.

However, the recent soft batch of economic data has led some in the markets to speculate that the Fed may consider more monetary stimulus and keep interest rates at the record low of near zero percent well into next year.

Bernanke’s speech later at the International Monetary Conference in Atlanta, Georgia could have a huge impact on markets.

“Bernanke’s speech provides the Fed chairman with an opportunity to update his views on the state of the economy,” said Neil MacKinnon, global macro strategist at VTB Capital. “In light of the soft data on house prices, industrial production and the labour market there is no doubt that the Fed’s projection of 3.1-3.3 percent GDP growth for this year is demanding.”

In the run-up to the speech, which is due to be delivered around 1945 GMT, stocks were relatively solid. European shares were further buoyed by news that retail sales in the 17 countries that use the euro rose by 0.9 percent in April, three times the rate anticipated.

In Europe, Germany’s DAX rose 0.6 percent to 7,130 while the CAC-40 in France was 0.6 percent higher at 3,887. The FTSE 100 index of leading British shares was up 0.3 percent at 5,878 .

Wall Street was also poised to recoup some recent losses, which have pushed the main indexes to their lowest levels since late March free business cards. Dow futures were up 0.4 percent at 12,132 while the broader Standard & Poor’s 500 futures rose 0.5 percent to 1,291.

The other big theme in the markets, aside from the state of the global economy, remains Europe’s debt crisis.

Last Friday’s effective decision by the European Union and the International Monetary Fund to give Greece the next euro12 billion batch of bailout funds and signals it may get a second bailout have helped ease worries that the country will default on its mountain of debts.

The relief is particularly notable in the performance of the euro, which was trading near one-month highs of $1.4674. Earlier, it struck its highest level since May 5 at $1.4682.

Asian shares, meanwhile, turned in a mixed performance.

Though Japan’s Nikkei 225 closed up 0.7 percent at 9,442.95, South Korea’s Kospi index slipped 0.7 percent to 2,099.71,

Hong Kong’s Hang Seng index lost 0.4 percent to 22,868.67 while mainland Chinese shares gained as investors kept on snapping up bargains following recent sell-offs. The benchmark Shanghai Composite Index gained 0.6 percent to 2,744.30, while the Shenzhen Composite Index of China’s smaller, second exchange gained 0.7 percent to 1,132.69.

Oil prices meanwhile continued to trade in a fairly narrow range around the $100 a barrel mark ahead of a meeting of the OPEC oil cartel. Benchmark crude for July delivery was up 11 cents to $99.12 in electronic trading on the New York Mercantile Exchange.

Analysts are looking for clues on what OPEC will do about oil production when the cartel meets Wednesday in Vienna. OPEC ministers could decide to try to lower oil prices by increasing production. Some OPEC officials have said that they believe oil prices are too high and threaten global economic recovery.

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Pamela Sampson in Bangkok contributed to this report.

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Turkey’s prime minister said Tuesday that Moammar Gadhafi must “immediately step down,” a major escalation of Turkish pressure on the Libyan leader with whom Turkey has long-standing ties.

Gadhafi has ignored calls for change in Libya and instead preferred “blood, tears and pressure against his own people,” Recep Tayyip Erdogan told a news conference in Istanbul. “Gadhafi must take a historic step and withdraw, for the future of Libya, its peace and prosperity.”

Previously, Turkish leaders had gently urged Gadhafi to meet demands for change from the rebellious opposition, then suggested that he step down. But Erdogan’s comments on Tuesday were his strongest public message to Gadhafi yet.

Last month, Erdogan proposed a roadmap for peace in Libya, urging forces loyal to Gadhafi to withdraw from besieged cities and calling for the establishment of humanitarian aid corridors and comprehensive democratic change.

On Monday, Turkey temporarily closed its embassy in the Libyan capital due to deteriorating security and its staff were evacuated to Tunisia. On Sunday, vandals burned the British and Italian embassies and a U.N. office in Tripoli. The U.N. has withdrawn its international staff. The Turkish consulate in rebel-controlled Benghazi, Libya, remains open.

Turkey initially balked at the idea of military action in Libya, but citing its responsibilities as a NATO member it took part in the enforcement of an arms embargo on Libya while volunteering to lead humanitarian aid efforts.

Turkey has vast trade interests in Libya, where Turkish companies have been involved in lucrative construction projects worth billions of dollars, building hospitals, shopping malls and five-star hotels before the chaos.

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The region’s beleaguered job market received a dose of good news Wednesday: March was its strongest month in two years. Still, there is lots of room to strengthen.

Metro St. Louis added 13,100 jobs in March, its biggest one-month gain in more than two decades of records, according to new figures from the Bureau of Labor Statistics. The unemployment rate dipped to 8.8 percent, its lowest point since January 2009.

The numbers, which are adjusted to reflect seasonal hiring trends, echo national figures put out earlier this month. And they are the latest sign that the recovery

South African inflation accelerated to a nine-month high of 4.1 percent in March as food and fuel prices climbed, adding to pressure on the central bank to raise interest rates from a 30-year low.

The inflation rate rose from 3.7 percent in February, the Pretoria-based statistics office said on its website today. The median estimate of 21 economists surveyed by Bloomberg was for the rate to increase to 4 percent. Prices advanced 1.2 percent in the month.

The Reserve Bank, which left its benchmark interest rate unchanged at 5.5 percent in March, is monitoring to determine whether rising food and fuel prices are pushing up costs more broadly in the economy, Deputy Governor Daniel Mminele said on April 16. While the bank expects inflation to remain inside its 3 percent to 6 percent target range until the end of 2012, there are “significant upside risks” to the outlook, he said.

“Higher food and fuel prices are likely to be the dominant inflationary theme over the next few months,” said Carmen Altenkirch, an economist at Nedbank Group Ltd. in Johannesburg. “The upside to our interest-rate forecast has increased over the past month. The Reserve Bank may opt to react pre-emptively, hiking rates in the second half of the year.”

The rand was at 6.7805 against the dollar as of 11:16 a.m. in Johannesburg from 6.7883 before the data was released. The yield on the R157 government bond, due 2015, was unchanged at 7.66 percent.

Gasoline Prices

The government boosted gasoline prices by 5.7 percent this month and 4.8 percent in March. White corn, a staple food in South Africa, has surged 31 percent on the South Africa Futures Exchange in the past six months.

The Reserve Bank cut its key rate three times last year to spur growth in Africa’s biggest economy, which the bank expects to expand 3.7 percent this year.

Consumers are starting to benefit from lower interest rates, with retail sales probably increasing an annual 7.1 percent in February from 6.4 percent in the previous month, according to the median estimate of 16 economists surveyed by Bloomberg. The statistics office is due to publish the data at 1 p.m. local time today.

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Stock in Lee Enterprises rose 5 percent Monday after the company announced plans to refinance $1.05 billion in loans.

The publisher, owner of the St no fax payday advances. Louis Post-Dispatch and other newspapers, said it would issue bonds to replace virtually all its debt. Moody’s Investor Services rated the company Caa1

The number of Americans filing first-time claims for unemployment benefits fell by 10,000 last week, while the overall jobless rolls also declined, according to a government report released Thursday.

There were 382,000 initial jobless claims filed in the week ended April 2, the Labor Department said. The figure was down from the previous week’s revised 392,000.

Economists were expecting 386,000 initial claims in the latest report, according to consensus estimates gathered by Briefing.com.

Initial claims filings have been on the decline for several months, raising hopes that the recovery in the job market is gaining steam payday lenders. The government said last week that the U.S. economy added 216,000 jobs in March, while the unemployment rate edged down to 8.8%.

In addition to the drop in initial claims, the number of Americans filing ongoing claims for unemployment benefits fell 9,000 to 3,723,000 in the week ended March 26, the most recent week available. 

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The number of Americans filing for bankruptcy dropped 6% in the first quarter of 2011 compared to the previous year, two industry groups said Monday.

The number of filings in the first three months of 2011 dropped to 340,012, down from 363,215 filings recorded in the first quarter of 2010, according to data from the American Bankruptcy Institute and the National Bankruptcy Research Center.

"Though bankruptcy filings are still elevated, consumers continue to take steps to reduce debt levels and shore up their finances," said ABI Executive Director Samuel Gerdano said in a statement.

Bottom line: the sharp increase in bankruptcy levels in recent years might be starting to level off, and maybe even decrease low fee pay day loans.

Personal bankruptcy filings had been climbing steadily since 2007, when the U.S. fell into a deep recession that has left millions of Americans unemployed.

"[W]e now expect that consumer bankruptcy filings will dip below the 1.5 million filings recorded last year," Gerdano said.

In 2005 Congress amended the Bankruptcy Code, making it harder for Americans to file and sparking a rush to file by October of 2005, when the amendments kicked in. In 2005, bankruptcy filings totaled more than 2 million.  

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The four companies that are still receiving the largest amounts of government bailout aid won’t be able to raise the amount of cash they pay out to their top executives this year, the administration’s pay czar has ruled.

The decisions, released late Friday, cover 2011 compensation for the top 25 executives at General Motors Co., Chrysler, American International Group Inc. and Ally Financial Inc., the former financing arm of GM. The rulings clear the way for millions of dollars in salary and bonuses to be paid out by companies that are still repay the billions in aid they received during the financial crisis from the government’s $700 billion Troubled Asset Relief Program.

While the companies can’t give cash raises, they are being allowed to boost the value of deferred stock awards to their executives. The Treasury Department defended that decision, saying it is in line with pay guidelines that it used to make compensation decisions in 2009 and 2010.

The government’s findings do not identify the executives by name but only by salary rankings.

The highest-paid executive at insurance giant AIG will total compensation of $10.5 million in 2011, including a $3 million salary, the largest of any of the pay packages approved Friday by the pay czar. AIG confirmed in a filing with regulators Friday that President and CEO Robert Benmosche’s pay will stand at $10.5 million this year, the same package he received in 2010.

GM’s highest-paid executive will receive $1.7 million in salary for 2011 and performance-based stock awards that will bring total compensation to $9 million. The highest-paid executive at Ally Financial will receive no cash salary in 2011 but can be granted performance-based stock awards worth $9.5 million. GM is headed by Chairman and CEO Dan Akerson, and Ally’s CEO is Michael Carpenter.

AIG nearly went under during the 2008 financial crisis. It had written insurance on the value of hundreds of billions in mortgage investments held by financial institutions. When the investments lost value, AIG could not afford to make good on its contracts. It took government help to stay out of bankruptcy and received a bailout package with a total value of $182 billion. The government got a 92 percent stake in the company and hopes to start selling the shares soon to help recoup its money. The company also has been selling off assets to repay the aid free credit score online.

Taxpayers provided a total of $49.5 billion to GM as it went through a bankruptcy reorganization in 2009. The Treasury Department has trimmed its stake in GM to 26.5 percent of the company from 61 percent, when it sold $23.1 billion of GM stock at an initial public offering in November. Treasury will need to sell its remaining GM shares at an average price of $53 to break even on the bailout.

Ally, which is 74 percent owned by the government, announced this week that it is preparing an initial public stock offering as a way to repay a portion of the $17.2 billion in aid it received.

The highest-paid executive at Chrysler, Sergio Marchionne, who is head of both Chrysler and Italy’s Fiat, is not affected by the pay restrictions because he receives his salary from Fiat. The pay czar’s filing showed that the second-highest paid executive at Chrysler will receive $500,000 in cash salary this year and total compensation of $1.18 million.

The compensation decisions were announced by Patricia Geoghegan, who succeeded Kenneth Feinberg last September. Geoghegan, a tax and compensation lawyer, came to Treasury after retiring as a partner from the New York law firm of Cravath, Swaine and Moore.

Feinberg’s departure last fall ended a contentious 14-month career as pay czar in which critics contended he had not done enough to reign in excessive salaries and bonuses at companies rescued by billions of dollars of taxpayer support. Feinberg now oversees a $20 billion fund created by BP PLC to compensate victims of the Gulf of Mexico oil spill.

Feinberg argued that his efforts had laid the foundation for a new compensation system based on longterm performance.

In a final report, Feinberg recommended that future compensation decisions should place limits on guaranteed cash payments and require that pay packages have a significant performance component.

Sen. Bernie Sanders, I-Vermont, one of Feinberg’s most vocal critics, contended that Feinberg had not been tough enough in cracking down on the pay excesses on Wall Street that had contributed to the financial crisis by encouraging excessive risk-taking.

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Group of 20 leaders may limit criticism of the Federal Reserve for flooding the world with money when they meet in China as Europe’s debt crisis and Japan’s disaster take precedence.

U.S. Treasury Secretary Timothy F. Geithner, French President Nicholas Sarkozy, Chinese Vice Premier Wang Qishan and European Central Bank President Jean-Claude Trichet will gather in Nanjing for a one-day seminar on the international monetary system tomorrow. China, Brazil and South Korea all previously slammed the Fed’s $600 billion program for driving down the dollar and fueling asset bubbles in emerging markets.

A 9.0-magnitude earthquake in Japan, armed NATO intervention in Libya, and the heightened prospect of a bailout of Portugal are among developments since Sarkozy proposed the meeting seven months ago. At the same time, the Fed plans to end its Treasury purchases in June and officials have signaled that additional quantitative easing is unlikely as the American economy is showing signs of strengthening.

Criticism of U.S. monetary policy is “so yesterday,” said Chris Rupkey, chief financial economist at Bank of Tokyo- Mitsubishi UFJ in New York. “World leaders and monetary officials have a lot more important things on their plate.”

Officials including French Finance Minister Christine Lagarde will discuss topics including “shortcomings in the international monetary system” and dealing with volatile capital flows, according to the schedule for the conference in Nanjing, a city on the Yangtze River about 170 miles (270 kilometers) from Shanghai.

Currency Intervention

The meeting comes after Portugal’s 10-year bond yield advanced to a euro-era record, unrest in the Middle East and North Africa pushed crude oil over $100 a barrel, and the Group of Seven nations this month triggered the biggest fall in Japan’s yen in more than two years. A weaker currency may help Japanese exporters to weather a disaster spanning nuclear leaks and the annihilation of northeastern towns.

Jim O’Neill, chairman of Goldman Sachs Asset Management International, said it will be “fascinating” to see how a Chinese delegation including central bank Governor Zhou Xiaochuan reacts to any discussion of the G-7 move.

China itself intervenes to limit gains by the yuan, drawing criticism from trading partners including the U.S. The currency traded at 6.5610 per dollar yesterday after touching a 17-year high of 6.5552 on March 22.

The host nation has been one of the biggest critics of U.S. monetary policy, blaming it for driving up commodity prices and stoking inflation, which reached a 28-month high of 5.1 percent in China in November.

Fed’s Easing

The Fed, which sets monetary policy independent of Geithner’s Treasury Department, has initiated two rounds of quantitative easing to support growth after the financial crisis.

“Some countries have further eased their monetary policies in order to spur economic recovery and that has caused rising global commodity prices,” Chinese Premier Wen Jiabao told chief executives gathered on March 21 at the Great Hall of the People in Beijing.

In an interview this week, Goldman’s O’Neill asked whether the Fed’s critics would rather see a permanently damaged American economy or a U.S. recovery where “one of the consequences might be higher commodity prices.”

O’Neill, who will speak in Nanjing in a panel on liquidity management moderated by U.K. Chancellor of the Exchequer George Osborne, said he expects possible changes to the International Monetary Fund’s Special Drawing Rights to be discussed. In 2009, Zhou suggested in a policy paper that SDRs may be the basis for a new global currency.

Sarkozy’s Agenda

While French officials said there will be no group statements or decisions, Sarkozy’s own agenda in China includes pushing industrial projects such as Areva SA (CEI) nuclear-power plants, Airbus SAS planes and Alstom SA (ALO) high-speed trains.

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The yen weakened for a second day against all of its major counterparts on speculation Group of Seven nations will keep selling the currency to curb its appreciation and help support Japan’s economy.

The yen extended losses after sliding the most against the dollar in six months on March 18, when the G-7 intervened to bring the currency down from a postwar high and assist Japan’s recovery from its biggest-ever earthquake. Switzerland’s franc weakened as Japan made progress controlling a damaged nuclear reactor, sapping demand for the currency as a haven. The euro fluctuated against the dollar as the region’s finance ministers meet to hammer out details of a debt-crisis solution.

“People are not really willing to take on the G-7 for now,” said Geoffrey Yu, a foreign exchange strategist at UBS AG. “They know the G-7 will intervene again.”

Japan’s currency weakened 0.6 percent to 81.06 per dollar at 8:36 a.m. in New York after slumping 2.1 percent on March 18. The yen depreciated 0.6 percent to 114.96 per euro. The euro was little changed against the dollar to $1.4169. Financial markets in Japan were shut today for a national holiday.

An exchange rate of “80 per dollar is probably the line in the sand that the Bank of Japan would want to defend,” Yu said.

Postwar High

The yen surged to a post-World War II high of 76.25 versus the dollar on March 17 after a 9.0-magnitude earthquake and tsunami struck Japan on March 11, damaging cooling systems at a nuclear-power plant north of Tokyo. The currency’s gain came amid speculation investors were repatriating assets to fund an estimated 10 trillion yen ($123.6 billion) for reconstruction.

Japan’s Prime MinisterNaoto Kan said today he sees “light at the end of the tunnel” for Japan’s crisis and that progress is being made in restoring power to reactors at the Fukushima Dai-Ichi nuclear plant.

The G-7, which comprises the U.S., Japan, Germany, the U.K., France, Canada and Italy, sold yen on March 18 after finance ministers spoke on a conference call, according to Japan’s Vice Finance Minister Fumihiko Igarashi. The G-7 statement promised to “provide any cooperation” with Japan.

“Today there is a bit of relief that the situation in Japan is not deteriorating,” which is damping demand for the Swiss franc, said Arne Lohmann Rasmussen, head of currency research at Danske Bank A/S in Copenhagen.

Switzerland’s franc weakened 0.4 percent against the euro to 1.2825 per euro and depreciated 0.4 percent against the dollar to 90.43 centimes.

Wells Fargo & Co. and Bank of Tokyo-Mitsubishi UFJ Ltd. say the yen’s gains will reverse as Bank of Japan Governor Masaaki Shirakawa injects cash into the financial system just as his peers prepare to tighten monetary policy.

Weaker Yen

“The yen will weaken over time,” said Nick Bennenbroek, head of currency strategy at Wells Fargo, the second most- accurate predictor of Japan’s currency against the euro in the six quarters through December, according to Bloomberg data. “The policy response from the authorities is going to be quite substantial. We would expect further intervention, at least from Japan business card.”

Bennenbroek expects a decline to 86 per dollar in 12 months, while Lee Hardman, a strategist at Bank of Tokyo in London, says it will depreciate to 89 by year-end.

The euro weakened against the dollar for the first day in three before euro-area finance ministers meet in Brussels to further develop a package of measures on the region’s debt crisis and economic governance. European Union leaders will hold a summit March 24-25 to discuss the measures.

EU Summit

European governments are trying to find a solution to the debt crisis that has roiled their region as the European Central Bank considers raising borrowing costs to stem inflation.

“There is some uncertainty about the finance ministers’ meeting today, how that will turn out, and then the EU summit on Thursday and Friday,” said Danske Bank’s Lohmann Rasmussen. “Last week people got a bit worried that the European Central Bank might get second thoughts about hiking rates, but it seems like they have no plans to do that, so there should still be support to the euro from rates.”

Euro-region inflation accelerated to 2.4 percent last month and has been above the ECB’s 2 percent limit since December. ECB governing council member Yves Mersch indicated today that he supports raising interest rates next month.

“It’s essential that the recent rise in inflation doesn’t lead to a general inflationary trend in the medium term,” Mersch wrote in a quarterly report published today by the Luxembourg Central Bank. “Strong vigilance is needed to contain upside risks to price stability.”

Dollar Index

The Dollar Index, which tracks the U.S. currency against six major peers including the euro, yen and British pound, fell for a third day. Oil futures climbed in New York as allied air strikes in Libya threatened to prolong a supply outage in North Africa’s third-biggest producer and renewed concern escalating turmoil may disrupt Middle East exports.

“It’s partly related to the higher price of oil, and there are lots of negative fiscal issues in the U.S. which are dollar negative,” said Jane Foley, a senior foreign-exchange strategist at Rabobank International in London. “Monetary policy in the U.S. remains very accommodative when other central banks are preparing to tighten, and there are fiscal issues bubbling away.”

The Dollar Index was 0.1 percent lower at 75.625. Oil futures advanced as much as 2.3 percent in New York.

The Australian and New Zealand dollars climbed for a second day versus the yen as higher oil prices increased demand for currencies linked to commodities.

“There’s a slight bullish bias this week,” said Mike Jones, a currency strategist at Bank of New Zealand Ltd. in Wellington. “High global commodity prices are a big boon for the kiwi and Aussie.”

Australia’s currency advanced 1.1 percent to $1.0065 while New Zealand’s dollar rose 0.6 percent to 73.54 U.S. cents.

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