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GLOBAL MARKETS-Shares dip but near recent highs, crude slips
October 18, 2012 / 3:10 PM / 5 years ago

GLOBAL MARKETS-Shares dip but near recent highs, crude slips

* Greenback hits two-month high versus yen

* Weak data, earnings, cap advance in stocks

* Spanish benchmark yield ticks lower after auction

By Rodrigo Campos

NEW YORK, Oct 18 (Reuters) - Global shares were little changed on Thursday following the best three-day run in a month, as weak earnings out of Europe offset better-than-expected Chinese economic figures.

The euro eased slightly against the dollar, but the single currency hit a five-month high against the yen in what has been a strong run as expectations grow that Spain will be bailed out before long.

Spain and Italy, two of the euro zone’s more troubled economies, both held successful bond sales on Thursday.

U.S. stocks were lower after weekly jobless claims rose far more than expected. Still, the benchmark S&P 500 remains within striking distance of its 2012 closing high of 1,465.77.

“This is giving investors a reason to take profits after a nice little run, but I think we’ll go back to focusing on earnings soon, and we’re starting to see buyers come back into the market already,” said Doug DePietro, head of trading at Evercore Partners in New York.

Wall Street got support from Verizon Communications after it said revenue was slightly above expectations while another Dow component, Travelers, posted operating earnings that were much stronger than expected.

Data showing China likely hit the bottom of a seven quarter-long economic downturn helped major averages in Asia and kept overall selling in check.

The Dow Jones industrial average was up 6.09 points, or 0.04 percent, at 13,563.09. The Standard & Poor’s 500 Index was down 0.68 points, or 0.05 percent, at 1,460.23. The Nasdaq Composite Index was down 10.86 points, or 0.35 percent, at 3,093.26.

The FTSEurofirst 300 index of top European shares was barely changed, close to its best levels in nearly a month. An MSCI index of global stocks edged up 0.1 percent after closing Wednesday at its highest in a month.

EURO DIPS BUT HOLDS RECENT GAINS

The dollar climbed to a two-month high against the yen after the Federal Reserve Bank of Philadelphia said its index of business conditions in the U.S. Mid-Atlantic region rose in October to 5.7 from -1.9 in September.

The euro also weakened against the greenback as the U.S. job market data overshadowed favorable demand at a Spanish bond sale.

“Jobless claims reverted to trend at 388,000; last week’s large drop was statistical,” said Joseph Trevisani, chief market strategist at Worldwide Markets, in Woodcliff Lake, New Jersey. “Improvement in the (U.S.)labor market will continue to be fitful and slow.”

The single currency fell 0.25 percent on the day to $1.3084, not too far from Wednesday’s one-month peak of $1.3139. Traders reported large option expiries at $1.3100, which may influence trade, keeping the euro close to that level.

European leaders will try to bridge deep differences over plans for a banking union at their summit o n T hursday, but no substantial decisions are expected. Moves to help Spain, Greece and Cyprus may come only at a finance ministers’ meeting next month, officials have told Reuters.

Spain remains the most immediate focus of attention, with the market expecting it to ask formally for international assistance very shortly, clearing the way for the European Central Bank to begin buying its bonds.

Spanish government bond yields fell after strong demand at a debt sale further fueled an improvement in sentiment toward the country, which hung on to its investment-grade credit rating earlier this week.

Ten-year Spanish bonds yields, which exceeded 7.6 percent in late July before the ECB promised to act, eased 8 basis points on the day, to 5.41 percent.

The benchmark 10-year U.S. Treasury note was up 1/32, the yield at 1.8167 percent.

CHINESE DATA HELPS

Equity bulls got relief from data showing China’s third-quarter gross domestic product grew 7.4 percent from a year earlier, which was below target but in line with expectations. However, September data for key areas like retail sales and industrial output did much better than forecast, pointing toward a recovery.

Brent crude for December dropped below $112 a barrel, pressured by signs of a healthier supply outlook and the U.S. jobless claims data, which offset the Chinese GDP data.

Brent was down $1.55 at $111.67 a barrel, while November U.S. oil fell $1.02 to $91.10.

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