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Shares hold on steady over earnings as US Treasuries dip

Stocks in major markets were little changed yesterday as the latest round of US corporate earnings kept equities in check, while US Treasury prices declined after home sales data added to anticipation of a rate hike by the US Federal Reserve later this year.

Wall Street was flat as quarterly earnings continued the early trend of companies topping earnings estimates but falling short of revenue expectations, providing little incentive for investors to push the S&P 500 up to a record or cause a significant pullback. The benchmark index is currently 1.1 per cent below its last intraday record set on February 25.

“We are moving along within a pretty tight range and that will likely continue until you start to see some shift,” said Ed Hyland, global investment specialist at JP Morgan Private Bank in Atlanta, Georgia.

“The earnings are important but only for the fact they indicate what is coming next, and outlooks will play an important part of the market’s view”

US Treasury prices extended their earlier decline after a stronger-than-anticipated 6.1 per cent climb in domestic home resales in March increased expectations the Fed would hike interest rates later in the year.

The Dow Jones industrial average rose 51.28 points, or 0.29 per cent, to 18,000.87, the S&P 500 gained 5.31 points, or 0.25 per cent, to 2,102.6 and the Nasdaq Composite added 4.25 points, or 0.08 per cent, to 5,018.35.

Benchmark 10-year notes were last down 14/32 in price to yield 1.963 per cent.

European stocks pulled back from earlier highs with a series of weak company earnings reports threatening to halt a two-day winning streak.

Greece’s debt crisis remained at the forefront of investors’ minds. But a gathering of European finance ministers this week won’t be the crunch meeting it had been billed as, giving Greek markets, euro zone bonds and the euro some breathing space.

MSCI’s all-country world index of equity performance in 46 countries inched up 0.14 per cent, while the FTSEurofirst 300 index of top European shares was flat at 1,628.47. Germany’s DAX fell 0.5 per cent.

The Greek government’s looming cash crunch initially weighed on local markets as Greek stocks hit a three-year low, but by late European trading the benchmark Greek equity index was 2.1 per cent higher.

European finance ministers meet in Riga to discuss Greece this week.

The deadline for agreement will be pushed back, however, and the market remained cautious after Greek finance minister Yanis Varoufakis cited signs of convergence on Tuesday.

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