Crude oil edged higher and gold prices rose yesterday on the back of a softer US dollar, while earnings hurt Wall Street and helped drag a gauge of major global stock markets lower.
Spot gold prices halted a plunge of nearly six per cent in the past six days, after hitting a five-year low on Monday as investors dumped inflation hedges. A stronger US dollar and Greece looking to seal a bailout deal added to the bearish catalysts for the metal.
US crude oil futures rose after slipping under $50 a barrel, while Brent remained towards the bottom of its $55-$60 a barrel range, near its lowest since early April.
Stocks on Wall Street fell, with results from bellwethers IBM and United Technologies weighing the most on the S&P 500, while Apple was also down ahead of its earnings report, expected after the closing bell.
Of the 81 companies in the S&P 500 that have reported earnings, 70 per cent have been above analyst expectations while just 53 per cent have beaten on revenue.
“We remain cautious regarding earnings because there is a lack of revenue growth,” said John Toohey, head of equities at USAA Investments in San Antonio, Texas.
“For the bull market to be sustainable, we need to transition from financial engineering to organic revenue growth.”
At 1pm EDT (1700 GMT) the Dow Jones industrial average was down 202.47 points, or 1.12 per cent, to 17,897.94, the S&P 500 lost 9.43 points, or 0.44 per cent, to 2,118.85 and the Nasdaq Composite dropped 11.41 points, or 0.22 per cent, to 5,207.45.
The FTSEurofirst 300 index of top European shares was down 1.1 per cent after rising 9.3 per cent in the previous nine sessions. MSCI’s gauge of major global stock markets slipped 0.2 per cent.
The euro bounced back against the dollar after hitting a three-month low on Monday. It was last up 1.2 per cent at $1.0952 and the dollar index, which measures the greenback against a basket of currencies, fell 0.8 per cent.
The dollar strength is seen returning in the short term on expectation of rate differentials, as the US Federal Reserve prepares to raise interest rates by year-end.
“The tension is fading on the euro down there,” said David Rodriguez, quantitative strategist at FXCM in New York. “The dollar is still in control.”
Spot gold added 0.9 per cent on the day to $1,106.28 after sliding towards $1,088 on Monday.
Oil prices edged up as the US dollar slipped, but were set for large monthly drops in the face of a global supply glut.
Brent crude futures were up one cent at $56.66 a barrel. US crude futures rose 10 cents to $50.25.
US Treasuries prices rose as stocks fell, with reduced concerns over Greece’s debt crisis keeping gains in check.
Benchmark 10-year Treasury notes were last up 9/32 in price to yield 2.3416 per cent, from 2.374 late on Monday. US 30-year bonds were last up 16/32 to yield 3.0812 per cent, from a yield of 3.106 per cent late on Monday.