Downbeat U.S. earnings cap investor enthusiasm; euro drops on soft data
By Stephen Culp NEW YORK (Reuters) - U.S. stocks were mixed on Wednesday as a series of disappointing second-quarter results curbed investor optimism over a new round of U.S.-China trade talks next week, while the euro dropped to a two-month low, pressured by soft economic data
By Stephen Culp
NEW YORK (Reuters) - U.S. stocks were mixed on Wednesday as a series of disappointing second-quarter results curbed investor optimism over a new round of U.S.-China trade talks next week, while the euro dropped to a two-month low, pressured by soft economic data.
Boeing posted its biggest loss in a decade, owing to the grounding of its 737 MAX aircraft, while Caterpillar was challenged by weak China sales in the face of the trade war.
"Tariffs are starting to hit profits for large multinational companies and are one reason global economic growth is softening," said David Carter, chief investment officer at Lenox Wealth Advisors in New York. "Thankfully, the Fed is aware of this and is likely to lower rates next week."
Investors had been heartened in recent days by hopes for trade negotiations and expectations the European Central Bank and the U.S. Federal Reserve will ease monetary policy.
The Dow Jones Industrial Average <.DJI> fell 116.76 points, or 0.43%, to 27,232.43, the S&P 500 <.SPX> gained 4.53 points, or 0.15%, to 3,010 and the Nasdaq Composite <.IXIC> added 32.02 points, or 0.39%, to 8,283.42.
A series of purchasing manager index (PMI) readings in the United States and Europe were weaker than expected, capping gains in equity markets worldwide.
"Economic growth in Europe continues to clearly slow," Carter added. "There's tremendous uncertainty in Europe and the ECB may be out of bullets."
The pan-European STOXX 600 index <.STOXX> rose 0.05% and MSCI's gauge of stocks across the globe <.MIWD00000PUS> gained 0.13%.
PMI data showed euro zone manufacturing contracting for the sixth straight month, dragging the euro to a two-month low against the dollar.
The dollar index <.DXY>, tracking the greenback against six major currencies, fell 0.04%, with the euro
The Canadian dollar fell 0.04% versus the greenback at 1.31 per dollar.
"Throughout the world there's now a race to have the least expensive currency," said Carter. "This is one reason so many central banks are easing policy."
U.S. Treasuries yields fell in line with yield declines in European government debt after the downbeat economic data fuelled expectations that the European Central Bank will cut interest rates.
Benchmark 10-year notes
The 30-year bond
Oil prices inched up in the face of a large decrease in U.S. crude stockpiles as investors fretted about global oil demand.
(Reporting by Stephen Culp; additional reporting by Ritvik Carvalho; Editing by David Gregorio)
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