US stocks fell as the week’s second big serving of corporate earnings did much less to reassure bulls than yesterday’s almost uniformly strong reports. The dollar and Treasuries rose.
The S&P 500 Index slid back below 2 800, heading for a second loss in three days. IBM’s disappointing results dragged the Dow Jones Industrial Average lower by more than 200 points.
Netflix was the best performer in the broader measure after blowout subscriber numbers. Home Depot sank with homebuilders as housing starts missed estimates. Suppliers of auto parts led losses among retailers.
Ten-year Treasury yields remained in a tight range around 3.15% ahead of Federal Reserve meeting minutes, while the dollar rose the most in a week.
The pound dropped after UK inflation slowed more than expected, while the euro slipped as consumer price numbers came in as expected. Oil edged downward after OPEC’s secretary general said the market will remain well-supplied.
A week after US equity markets plunged, investors have been digesting solid results from the likes of Goldman Sachs, Johnson & Johnson and Netflix.
It’s still early in the earnings season but the better-than-expected numbers are welcome amid a risk-heavy global picture, which features periodic Brexit headlines, a divisive Italian budget, a lingering trade spat between the US and China, concern surrounding the disappearance of a Saudi journalist and President Donald Trump’s criticism of the Federal Reserve.
While corporate results continue to arrive, the Fed will be back at the top of the agenda when the minutes of the latest policy meeting arrive later on Wednesday. They should offer more clues on the outlook for policy tightening into next year.
Elsewhere, emerging-market stocks struggled to build on Tuesday’s gains while their currencies turned lower. Turkish assets were mostly stable as the country took advantage of a lull in political turmoil to return to the dollar bond market.
Earlier in Asia the mood was more upbeat, with Japanese, South Korean and Australian shares all posting strong gains.
Here are some key events coming up this week:
Minutes from the Fed will be published on Wednesday. The EIA crude oil inventory report is due the same day. Third-quarter GDP for China comes Friday in addition to last month’s retail sales and factory output.
These are the main moves in markets:
The S&P 500 Index declined 0.4% as of 10:10 New York time. The Stoxx Europe 600 Index dipped less than 0.4%. The U.K.’s FTSE 100 Index climbed 0.2% to the highest in a week. Germany’s DAX Index sank 0.3%. The MSCI Asia Pacific Index jumped 0.8% to the highest in a week. The MSCI Emerging Market Index was little changed.
The Bloomberg Dollar Spot Index advanced 0.2% to the highest in a week. The euro declined 0.3% to $1.1536, the weakest in a week. The British pound declined 0.5% to $1.3119, the weakest in more than a week. The Japanese yen fell less than 0.05% to 112.29 per dollar, the weakest in a week.
The yield on 10-year Treasuries decreased one basis point to 3.15%. Germany’s 10-year yield decreased three basis points to 0.46%, the lowest in more than two weeks. Britain’s 10-year yield dipped four basis points to 1.567%, hitting the lowest in more than two weeks with its fifth straight decline. The spread of Italy’s 10-year bonds over Germany’s rose eight basis points to 3.0461 percentage points.
West Texas Intermediate crude decreased 1% to $71.18 a barrel. Gold fell 0.2% to $1 228.60 an ounce.
* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER