Wall Street slides, bond yields rise on mixed earnings, ECB statement

By Stephen Culp NEW YORK (Reuters) - U.S.

Reuters July 26, 2019 00:07:44 IST
Wall Street slides, bond yields rise on mixed earnings, ECB statement

Wall Street slides bond yields rise on mixed earnings ECB statement

By Stephen Culp

NEW YORK (Reuters) - U.S. stocks stumbled out of the starting gate and bond yields gained ground following mixed earnings and a rosier-than-expected statement from the European Central Bank's governor.

After the ECB signalled its intention cut interest rates and explore additional monetary easing opportunities, governor Mario Draghi sounded more upbeat on the economy than expected, sending equities lower and boosting government debt yields.

A mixed bag of earnings reports from a wide range of U.S. companies pulled Wall Street lower a day after the S&P 500 and the Nasdaq hit record highs, as a common theme of profit beats amid flagging revenues began to emerge.

"That's been the M.O. for earnings for a while," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago. "The financial engineering such as buybacks and cost-cutting continues to go on, and that's why you're seeing these beats, while the top-line growth is constrained by a slowdown in global growth in general."

Corporate results are increasingly pointing to an economic slowdown in the midst of a protracted trade war between the United States and China, which should encourage the U.S. Federal Reserve to cut interest rates next Wednesday for the first time in a decade.

"Investors are waiting for our ECB counterpart next week when (Fed) chairman Powell makes his statement and see how that sets us up for the rest of the year," Nolte added.

The Dow Jones Industrial Average fell 54.36 points, or 0.2%, to 27,215.61, the S&P 500 lost 5.78 points, or 0.19%, to 3,013.78 and the Nasdaq Composite dropped 43.18 points, or 0.52%, to 8,278.33.

European stocks reversed their initial knee-jerk gains in reaction to the ECB's easing intentions after the central bank's governor Mario Draghi sounded more upbeat on the economy than expected.

The pan-European STOXX 600 index lost 0.36% and MSCI's gauge of stocks across the globe shed 0.20%.

U.S. Treasury yields rose after Draghi said the ECB sees a low risk of a recession in the euro zone, even as he acknowledged a worsening outlook.

Benchmark 10-year notes last fell 8/32 in price to yield 2.0775%, from 2.05% late on Wednesday.

The 30-year bond last fell 22/32 in price to yield 2.609%, from 2.578% late on Wednesday.

The dollar index, which measures the greenback against a basket of world currencies, slipped versus the euro, which bounced off a two-month low following Draghi's upbeat statement.

The dollar index fell 0.07%, with the euro up 0.17% to $1.1158.

The Japanese yen weakened 0.34% versus the greenback at 108.56 per dollar, while Sterling was last trading at $1.249, up 0.07% on the day.

Oil prices rose as Middle East tensions and a substantial drop in U.S. crude stocks raised supply concerns, but faced headwinds in the form slowing economic growth that could reduce fuel demand.

U.S. crude rose 0.84% to $56.35 per barrel and Brent was last at $63.73, up 0.87% on the day.

Spot gold dropped 0.5% to $1,418.80 an ounce.

Copper rose 0.23% to $6,013.00 a tonne.

Three-month aluminum on the London Metal Exchange rose 0.08% to $1,827.50 a tonne.

(Reporting by Stephen Culp; additional reporting by Marc Jones and Saikat Chatterjee in London and Swati Pandey in Sydney; Editing by Nick Zieminski)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

Guinea president 'captured', govt dissolved, claim army putschists'; attack on presidential palace repulsed, say authorities
World

Guinea president 'captured', govt dissolved, claim army putschists'; attack on presidential palace repulsed, say authorities

Reports suggest that they captured President Alpha Conde and dissolved the government, bust the ground situation remains unclear

Cryptocurrency prices tumble and exchange trading falters as snags crop up
News & Analysis

Cryptocurrency prices tumble and exchange trading falters as snags crop up

NEW YORK (Reuters) -The price of cryptocurrencies plunged and crypto trading was delayed on Tuesday, a day in which El Salvador ran into snags as the first country to adopt bitcoin as legal tender. Shares of blockchain-related firms also fell as crypto stocks were hit by trading platform outages. But the major focus was on El Salvador, where the government had to temporarily unplug a digital wallet to cope with demand.

Ford poaches Apple's car project chief Doug Field
News & Analysis

Ford poaches Apple's car project chief Doug Field

By Joseph White and Sanjana Shivdas (Reuters) -The head of Apple Inc's car project, Doug Field, is going to work for Ford Motor Co to lead the automaker's advanced technology and embedded systems efforts, a hiring coup for Ford Chief Executive Jim Farley.