Global shares falter as Wall St tumbles; bond prices fall
NEW YORK (Reuters) - Global equity markets fell on Wednesday, reversing earlier gains driven by solid corporate earnings and mild U.S. inflation data that may let the Federal Reserve keep interest rates lower for longer, as U.S. stocks retreated after some big corporate names sold off.
Wall Street fell as Boeing Co and Biogen Idec tumbled after their results disappointed investors, the two biggest drags on the S&P 500.
Boeing lost 4.5 percent as analysts raised concern about the costs of its 787 Dreamliner jet. Biogen slid 5.4 percent after reporting that sales of its big-selling new multiple sclerosis drug, Tecfidera, fell short of Wall Street's lofty expectations.
"The season has been mixed, and the global economy is a concern for big multinational companies, but the fact that the market can shake off some bad reports is indicative of what good footing it is on right now," said Bruce Bittles, chief investment strategist at Robert W. Baird & Co in Nashville.
The retreat on Wall Street pulled MSCI's gauge of global equity performance lower. Earlier in the day, European stocks closed higher, largely driven by earnings.
GlaxoSmithKline rose 2.6 percent in London after saying it expects an Ebola vaccine to be ready this year.
Wall Street initially rose, lifted by U.S. tech names after both Yahoo Inc and Broadcom beat revenue expectations late Tuesday.
MSCI's all-country world stock index traded down 0.21 percent after having risen earlier. The pan-European FTSEurofirst 300 closed up 0.73 percent at 1,308.73.
The Dow Jones industrial average closed down 153.49 points, or 0.92 percent, to 16,461.32. The S&P 500 slid 14.17 points, or 0.73 percent, to 1,927.11, and the Nasdaq Composite lost 36.63 points, or 0.83 percent, to 4,382.85.
Earnings overall remained solid. So far in Europe, 9 percent of STOXX 600 companies have reported results, of which 65 percent have met or beaten profit forecasts, according to Thomson Reuters data. Of 135 U.S. companies in the S&P 500 that have reported results, 68.9 percent beat expectations, higher than the rate over the previous four quarters, the data showed.
U.S. Treasuries prices fell as data showed a mild rebound in U.S. consumer prices in September. The reading reduced some bets the Fed might postpone possible plans to raise rates in 2015.
The U.S. Labor Department said CPI rose 0.1 percent last month as increasing food and shelter costs offset a broad decline in energy prices.
This less dire view on inflation spurred selling in Treasuries, with yields on the benchmark 10-year Treasury rising to their highest in a week near 2.25 percent.
The 10-year note was last down 4/32 in price to yield 2.2234 percent. The 30-year long bond pared losses, with its yield slipping below 3 percent.
Oil prices slipped in choppy trading after data showed a second consecutive weekly jump in U.S. crude stockpiles, as dealers tested the notion that last week's four-year low may have set a bottom.
The U.S. Energy Information Administration said crude stocks rose by 7.11 million barrels, more than double the 2.7 million barrel increase analysts had expected. [EIA/S]
Brent crude settled down $1.51 at $84.71 a barrel. U.S. crude fell $1.97 to settle at $80.52.
The U.S. dollar extended broad-based gains . The U.S. inflation data coupled with earlier concerns over European banks sent the greenback to one-week highs against the euro.
The euro was down 0.57 percent at $1.2640 after dropping to a one-week low of $1.2638. The dollar traded at 107.13 yen, a gain of 0.15 percent.
(Reporting by Herbert Lash Additional reporting by Charles Mikolajczak; Editing by Meredith Mazzilli, James Dalgleish and Leslie Adler)