New York: French President Nicolas Sarkozy and German Chancellor Angela Merkel failed to boost markets when discussing eurozone troubles, leaving investors at the mercy of poor economic data on both sides of the Atlantic.

US markets closed lower, despite positive company earnings reports, after Sarkozy and Merkel pledged to give the eurozone bloc a "true economic government" but offered no new initiatives for struggling periphery countries like Greece and Portugal.

European markets closed prior to the end of the two leaders' mini-summit, but took their cues from figures that showed the eurozone economy stalling in the second quarter, as well as more weak US housing data.

The Dow Jones Industrial Average finished down 0.67 per cent, ending a three-day winning streak; the broader S&P 500 lost 0.97 per cent.

In Europe, London's FTSE 100 index closed up 0.13 per cent; Frankfurt's main DAX index fell 0.45 per cent; and the Paris CAC 40 shed 0.25 per cent.

Asian markets had opened the day mixed, the Hang Seng Index down 0.24 per cent and Japan's Nikkei rising 0.23 per cent.

Dealers there said investors took quick profits on gains made in the past few days as the markets bounced back from some of the worst losses seen since the onset of the global financial crisis in 2008.

News that Fitch Ratings confirmed its top US credit rating was welcome after peer Standard and Poor's cut its assessment, but it had little immediate impact.

While London and Zurich were the only majors to close in positive territory, the European markets all came back from sharp early losses after disastrous eurozone figures showing the economy stalled in the second quarter.

German and French officials made it clear before the Sarkozy-Merkel meeting in Paris that issuing eurobonds to ease the pressure on weaker member states was definitely not on the agenda.

Germany opposes eurobonds as it believes that it would increase its own borrowing costs and allow countries to duck badly needed fiscal reforms.

The poor European growth data pressed the euro down against the dollar but only slightly, with traders citing some tightness in the markets.

(Agencies)