Disappointing corporate earnings handed European shares their biggest daily decline in over a week yesterday and left US stocks little changed, while Iran’s seizure of a cargo ship in the Persian Gulf lifted oil prices.
In US markets, shares of handbag and accessories maker Coach slumped 6.1 per cent while Ford Motor slipped one per cent after results from both companies fell short of estimates.
“Most of the big corporations are missing on revenue and eventually that’s going to hurt the markets as valuations stay high,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
European shares tumbled following some weaker-than-expected corporate updates, with paper maker UPM-Kymmene slipping after results while a new share issue hit Commerzbank .
The FTSEurofirst 300 gave back Monday’s gains and was on track for its biggest one-day decline since April 17.
Oil prices rose. Iranian forces boarded a Marshall Islands-flagged cargo ship in the Gulf yesterday, the Pentagon said.
Brent crude was last up 26 cents at $65.09 a barrel.
US crude was last up 10 cents at $57.09 per barrel.
Investors also traded cautiously at the start of the Federal Reserve’s two-day policy meeting. Analysts expect recent soft US data will nudge the US central bank towards a dovish monetary policy, while investors will scrutinise statements for hints about the timing of a rate hike.
The dollar index, which measures the greenback against a basket of major currencies, fell to an eight-week low of 96.011 after the Conference Board said its index of consumer attitudes fell to 95.2 from an upwardly revised 101.4 in March. Economists were looking for a reading of 102.5.
“The current period of dollar weakness appears to be gaining momentum and accordingly likely has further to run,” said Camilla Sutton, chief currency strategist at Scotiabank in Toronto. “A test of another one per cent in dollar weakness is likely in the near-term.”
The Dow Jones industrial average was last up 28.36 points, or 0.16 per cent, at 18,066.33.
The S&P 500 was up 1.22 points, or 0.06 per cent, at 2,110.14.
The Nasdaq Composite was down 2.24 points, or 0.04 per cent, at 5,058.01.
MSCI’s all-country world stock index, which tracks shares in 45 nations, was down 0.21 points or 0.05 per cent, to 441.96. Chinese shares eased off a new seven-year high, which also hurt the MSCI index’s performance. Europe’s broad FTSEurofirst 300 index dropped 1.64 per cent to 1,615.77.
Safe-haven US Treasury yields rose after stronger-than-expected home price data in February from S&P/Case-Shiller signaled resilience in US housing sector. Benchmark 10-year US Treasury notes were last down 9/32 in price to yield 1.96 per cent, from a yield of 1.92 per cent late Monday.
Spot gold prices rose $10.25 or 0.85 per cent, to $1,211.80 an ounce.