US stocks extended losses on Wednesday as weaker than expected earnings reports from technology giants weighed on market sentiment. The dollar traded higher after report the existing home sales grew more than expected. The ICE US dollar index was up 0.2%. S&P 500 ended 0.2% lower with five of its 10 sectors finishing with losses. The Nasdaq Composite fell 0.7%. Apple lost 4.2% as sales forecast for the current quarter missed expectations. Microsoft dropped 3.7% as it reported lower demand for Windows and $7.5 billion writedown on Nokia purchase. The disappointing results from Microsoft, IBM and Intel indicate lower IT spending by businesses. Boeing shares rose 1%, but shares of Yahoo Inc. dropped 1.2% as quarterly profit missed analysts’ expectations and it forecast lower-than-expected revenue for the current quarter. In economic news the Housing Price Index rose 0.4% in May after increasing 0.4% in April. Existing Home Sales for June increased 3.2% from May to an annualized rate of 5.49 million units, the fastest pace since February 2007. Today GM, McDonalds, Amazon.com, AT&T, Starbucks Corp and Visa Inc will be reporting quarterly earnings. At 13:30 CET Initial Jobless Claims and Continuing Claims will be released in US. The tentative outlook is positive. At 15:00 CET July advance Leading Index will be released by the Conference Board. The tentative outlook is negative.
European stocks fell for the second session as slumping commodity markets and disappointing corporate reports undermined investor confidence. The Stoxx Europe 600 fell 0.6%, led by more than 1.5% drops in technology and basic-materials sectors. Euro weakened 0.3% against the dollar. Apple suppliers Dialog Semiconductor and Infineon Technologies AG lost 5.2% and 6.3% respectively. Mining stocks Glencore PLC and Rio Tinto PLC fell 5.4% and 3.6% respectively. The Greek parliament today approved the second set of reform measures demanded by creditors after the austerity package was approved by majority of parliament’s special committee on Wednesday. As the last hurdle for starting the negotiations is removed Greece hopes to reach an agreement with international creditors by August 20, when it has to make 3.4 billion euro payment to the ECB. Today at 15:00 CET June Consumer Confidence index will be released in euro-zone. The tentative outlook is negative. At 09:30 CET June Retail Sales will be released in UK by the Office of National Statistics. The tentative outlook is positive.
Nikkei today rose 0.6% as yen weakened and investor optimism was buoyed by strong performance in retail and hospitality sectors, with the number of foreign visitors hitting record high in the first half of the year. In separate report the central bank said exports strengthened in June, rising 9.5% year over year, the fastest pace in 5 months, while imports fell 2.9%.
Oil prices are falling today after West Texas Intermediate crude for September delivery settled below $50 for first time since April on Wednesday as weekly report from the US government showed that inventories unexpectedly rose. The oversupply weighs on prices as US output remains high while OPEC increases production and growth in global demand is limited.
Gold is stabilizing today after falling for tenth session on Wednesday as it closed below $1100 an ounce. Goldman Sacks report predicted gold could fall under $1000 given capital flowing out of defensive havens, low inflation risk with commodity prices falling and speculation that the US and UK could start raising interest rates in coming months.