By Walter Brandimarte
NEW YORK |
Thu Jul 29, 2010 6:26pm EDT
NEW YORK (Reuters) - Global stocks fell on Thursday as tech companies' weak outlooks fueled recovery concerns, although the euro rose to a 12-week high against the dollar on better-than-expected European economic data.
Stocks erased initial gains, encouraging investors to buy safe-haven U.S. Treasuries, as investors worried that an expected economic slowdown will eventually hurt earnings.
Weak outlooks from chipmaker Nvidia Corp (NVDA.O) and software maker Symantec Corp (SYMC.O) added to those fears, offsetting a batch of strong quarterly earnings from major companies, including Exxon Mobil Corp (XOM.N), Rolls Royce Plc (RR.L) and BAE Systems Plc (BAES.L).
"There is still a lack of confidence in the sustainability of economic growth and the sustainability of the earnings stream being extended into 2011," said Heino Ruland, strategist at Ruland Research in Frankfurt.
Investors are particularly worried about Friday's report on U.S. gross domestic product, which is expected to show the economy lost steam in the second quarter.
Also hurting sentiment were comments from St. Louis Federal Reserve Bank President James Bullard, who said he is worried about the risks the United States could fall into a Japan-style quagmire of deflation and falling investment.
"Any time you make the comparison that the U.S. might look like Japan, that has to be considered a negative," said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.
Global stocks measured by the MSCI All-Country World Index .MIWD00000PUS dipped 0.05 percent. In Europe, the FTSEurofirst 300 .FTEU3 index of top shares fell 0.38 percent to end at 1,046.90 points, having earlier risen to a high of 1,060.96 points.
The Dow Jones industrial average .DJI lost 30.72 points, or 0.29 percent, to end at 10,467.16, while the Standard & Poor's 500 Index .SPX fell 4.60 points, or 0.42 percent, to 1,101.53. The Nasdaq Composite Index .IXIC declined 12.87 points, or 0.57 percent, to 2,251.69.
Shares of Nvidia Corp (NVDA.O) plunged 9.87 percent to $9.13. Symantec Corp (SYMC.O) stocks sank 11.18 percent to $13.03.
The PHLX Semiconductor Index .SOXX fell 1.9 percent. It remains up 6 percent for July.
Despite Thursday's pullback, the Dow managed to stay in positive territory for the year.
With just one trading day left in July, the major U.S. stock indexes were up about 7 percent for the month. At Thursday's close, the Dow was up 7.09 percent for July, while the S&P 500 was up 6.87 percent and the Nasdaq was up 6.75 percent.
EURO BRIEFLY POPS ABOVE $1.31
The euro climbed to a 12-week high against the dollar, however, as month-end demand and supportive data helped push the single currency above a key technical barrier.
The advance of the euro started early in the session after a jump in euro-zone economic sentiment to a 28-month high and a decline in German unemployment.
The euro rose 0.66 percent to $1.3078, its strongest since May 4. Earlier, it briefly traded at $1.3106.
The dollar also declined across the board after California declared a state of emergency over its finances on Wednesday.
The greenback was down against a basket of major trading-partner currencies, with the U.S. Dollar Index .DXY off 0.67 percent at 81.637.
Against the Japanese yen, the dollar was down 0.54 percent at 86.92.
"Economic resilience in Europe, particularly in Germany, despite the formidable sovereign credit headwinds, continues to fuel an unwinding of bets against the euro and push it higher across the board," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington, D.C.
SOME T-NOTES AND COMMODITIES RISE
Some U.S. Treasury debt prices turned higher as stocks fell, offsetting the impact of a soft auction of seven-year paper.
The 10-year U.S. Treasury note gained 2/32 in price, pushing its yield down to 2.9866 percent. The 2-year note was up 1/32, with the yield at 0.5855 percent.
In the commodities markets, U.S. crude oil rose $1.37, or 1.78 percent, to settle at $78.36 per barrel, boosted by the dollar's weakness.
Spot gold prices rose $3.38, or 0.29 percent, to $1,166.40 an ounce.
India, one of the world's largest gold consumers, bought physical gold at attractive prices and kept gold off Wednesday's three-month lows as the country stocked up on the precious metal before festivals.
Copper hit a three-month high as a weaker dollar and copper inventories data revived buyers' interest. Benchmark copper on the London Metal Exchange closed at $7,231 a tonne.
(Additional reporting by Edward Krudy, Emily Flitter and Nick Olivari in New York; Editing by Jan Paschal)
By Walter Brandimarte
NEW YORK |
Thu Jul 29, 2010 6:26pm EDT
NEW YORK (Reuters) - Global stocks fell on Thursday as tech companies' weak outlooks fueled recovery concerns, although the euro rose to a 12-week high against the dollar on better-than-expected European economic data.
Stocks erased initial gains, encouraging investors to buy safe-haven U.S. Treasuries, as investors worried that an expected economic slowdown will eventually hurt earnings.
Weak outlooks from chipmaker Nvidia Corp (NVDA.O) and software maker Symantec Corp (SYMC.O) added to those fears, offsetting a batch of strong quarterly earnings from major companies, including Exxon Mobil Corp (XOM.N), Rolls Royce Plc (RR.L) and BAE Systems Plc (BAES.L).
"There is still a lack of confidence in the sustainability of economic growth and the sustainability of the earnings stream being extended into 2011," said Heino Ruland, strategist at Ruland Research in Frankfurt.
Investors are particularly worried about Friday's report on U.S. gross domestic product, which is expected to show the economy lost steam in the second quarter.
Also hurting sentiment were comments from St. Louis Federal Reserve Bank President James Bullard, who said he is worried about the risks the United States could fall into a Japan-style quagmire of deflation and falling investment.
"Any time you make the comparison that the U.S. might look like Japan, that has to be considered a negative," said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.
Global stocks measured by the MSCI All-Country World Index .MIWD00000PUS dipped 0.05 percent. In Europe, the FTSEurofirst 300 .FTEU3 index of top shares fell 0.38 percent to end at 1,046.90 points, having earlier risen to a high of 1,060.96 points.
The Dow Jones industrial average .DJI lost 30.72 points, or 0.29 percent, to end at 10,467.16, while the Standard & Poor's 500 Index .SPX fell 4.60 points, or 0.42 percent, to 1,101.53. The Nasdaq Composite Index .IXIC declined 12.87 points, or 0.57 percent, to 2,251.69.
Shares of Nvidia Corp (NVDA.O) plunged 9.87 percent to $9.13. Symantec Corp (SYMC.O) stocks sank 11.18 percent to $13.03.
The PHLX Semiconductor Index .SOXX fell 1.9 percent. It remains up 6 percent for July.
Despite Thursday's pullback, the Dow managed to stay in positive territory for the year.
With just one trading day left in July, the major U.S. stock indexes were up about 7 percent for the month. At Thursday's close, the Dow was up 7.09 percent for July, while the S&P 500 was up 6.87 percent and the Nasdaq was up 6.75 percent.
EURO BRIEFLY POPS ABOVE $1.31
The euro climbed to a 12-week high against the dollar, however, as month-end demand and supportive data helped push the single currency above a key technical barrier.
The advance of the euro started early in the session after a jump in euro-zone economic sentiment to a 28-month high and a decline in German unemployment.
The euro rose 0.66 percent to $1.3078, its strongest since May 4. Earlier, it briefly traded at $1.3106.
The dollar also declined across the board after California declared a state of emergency over its finances on Wednesday.
The greenback was down against a basket of major trading-partner currencies, with the U.S. Dollar Index .DXY off 0.67 percent at 81.637.
Against the Japanese yen, the dollar was down 0.54 percent at 86.92.
"Economic resilience in Europe, particularly in Germany, despite the formidable sovereign credit headwinds, continues to fuel an unwinding of bets against the euro and push it higher across the board," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington, D.C.
SOME T-NOTES AND COMMODITIES RISE
Some U.S. Treasury debt prices turned higher as stocks fell, offsetting the impact of a soft auction of seven-year paper.
The 10-year U.S. Treasury note gained 2/32 in price, pushing its yield down to 2.9866 percent. The 2-year note was up 1/32, with the yield at 0.5855 percent.
In the commodities markets, U.S. crude oil rose $1.37, or 1.78 percent, to settle at $78.36 per barrel, boosted by the dollar's weakness.
Spot gold prices rose $3.38, or 0.29 percent, to $1,166.40 an ounce.
India, one of the world's largest gold consumers, bought physical gold at attractive prices and kept gold off Wednesday's three-month lows as the country stocked up on the precious metal before festivals.
Copper hit a three-month high as a weaker dollar and copper inventories data revived buyers' interest. Benchmark copper on the London Metal Exchange closed at $7,231 a tonne.
(Additional reporting by Edward Krudy, Emily Flitter and Nick Olivari in New York; Editing by Jan Paschal)
