Reuters: US Dollar Report: GLOBAL MARKETS-Weak earnings pressure shares, support U.S. Treasuries

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GLOBAL MARKETS-Weak earnings pressure shares, support U.S. Treasuries Oct 26th 2012, 16:10 Fri Oct 26, 2012 12:10pm EDT * Wall St hit by earnings; S&P down 1.7 percent for week * U.S. Treasuries climb in price with safe-haven support * U.S. 3rd-quarter economic growth accelerates to 2 percent By Angela Moon NEW YORK, Oct 26 (Reuters) - Global shares fell on Friday while U.S. Treasuries climbed with safe-haven support as lackluster corporate earnings reports undermined investor confidence. Although data showed a pick-up in U.S. economic growth in the third quarter, gloomy earnings and outlook statements from major global companies such as Apple and Amazon , South Korea's Samsung and Renault and Ericsson in Europe corroded hopes of a recovery in the global economy. Wall Street stocks fell as Apple shares declined more than 1 percent, although Amazon.com rebounded from earlier losses. U.S. gross domestic product expanded at a 2.0 percent annual rate, accelerating from the second quarter's 1.3 percent. But even the positive data was not be enough to stem a recent slide in the market, which has caused the S&P 500 index to drop 3.3 percent over the past six sessions, its worst 6-day run in five months. "In spite of the pleasant surprise on the top-line GDP number, the general tone of this report was not particularly encouraging as the unsustainable bounce in government spending in Q3 will leave a big hole that is unlikely to be filled in Q4," said Millan Mulraine, a senior economist at TD Securities in New York. In Europe, stocks erased earlier loses to trade little changed. The FTSEurofirst 300 was up 0.2 percent at 1,097.94, having traded as low as 1,087.50. The MSCI world equity index was down 0.5 percent at 327.76. "I think the overall market weakness is indicative of further confirmation that the earnings picture continues to get more challenging, and it's a global phenomenon," said Peter Boockvar, portfolio manager at Miller Tabak + Co in New York. The Dow Jones industrial average was down 54.13 points, or 0.41 percent, at 13,049.55. The Standard & Poor's 500 Index was down 8.74 points, or 0.62 percent, at 1,404.23. The Nasdaq Composite Index was down 22.50 points, or 0.75 percent, at 2,963.61. The S&P 500 was down 1.7 percent for the week, as dismal corporate earnings and cautious outlooks, especially from large multinationals, painted a pessimistic picture of the global economy. Adding to uncertainty was the impending U.S. presidential election on Nov. 6, with the benchmark S&P index below a key support level, the 50-day moving average, at around 1,434. Many analysts expect the retreat to wane near 1,400 or 1,375, as the Federal Reserve's latest stimulus policy puts a floor under equity prices. WEAK EARNINGS Late on Thursday, Apple Inc, the world's largest company by market capitalization, reported a second straight quarter of disappointing results and iPad sales fell well short of analysts' targets. The company also forecast revenue and margins below Wall Street forecasts. The stock was off 2.2 percent at $596.03. Amazon.com Inc also posted its first quarterly net loss in more than five years. It forecast fourth-quarter revenue that fell short of analysts' expectations. But the stock rose 2.8 percent to $229.11 on Friday, rebounding from earlier losses. With 244 companies in the S&P 500 having reported, 62.3 percent have beaten earnings expectations, a tad better than the typical 62 percent average, Thomson Reuters data showed. Revenue for the quarter has been more disappointing, with just 36.3 percent of companies reporting higher-than-expected revenue compared with a historic beat rate of 62 percent. U.S. Treasuries rose in price on Friday with safe-haven bidding spurred by lackluster corporate earnings and expectations the higher pace of third-quarter U.S. growth cannot be carried over into next year. Uncertainty over the impact of the "fiscal cliff" of tax increases and government spending cuts set to kick in at the beginning of next year also underpinned Treasuries purchases. Benchmark 10-year Treasury notes were trading 14/32 higher in price to yield 1.76 percent, down from 1.81 percent late Thursday and just below the 200-day moving average. Oil recovered from an earlier decline on Friday to trade slightly below $109 a barrel. Brent crude was up 31 cents to $108.80 a barrel, having fallen to as low as $107.40. U.S. oil slipped 26 cents to $85.79. In the currency market, the greenback pared losses versus the Japanese yen. The U.S. dollar last traded at 79.64 yen , still down 0.8 percent on the day. Link this Share this Digg this Email Reprints

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