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GLOBAL MARKETS-Shares, oil pressured by weak earnings

by on October 26, 2012 2:55 pm GMT
 

Fri Oct 26, 2012 10:55am EDT

* Wall St slips on earnings, outlooks; Amazon, Apple rebound

* Oil mixed on U.S. economic data, storm

* U.S. Q3 economic growth accelerates to 2 pct

By Angela Moon

NEW YORK, Oct 26 (Reuters) – Global shares fell and
commodities were mixed on Friday as lackluster corporate
earnings reports undermined investor confidence, although data
showing a pick-up in U.S. economic growth in the third quarter
limited losses.

Gloomy earnings and outlook statements from global giants
like as Apple and Amazon, South Korea’s
Samsung and Renault and Ericsson in Europe
have corroded hopes of a recovery in the global economy.

Wall Street stocks fell modestly despite data showing the
economy grew at a faster pace than expected and as shares of
Amazon.com and Apple Inc rebounded from
losses.

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 Europe, shares were flat, erasing early losses. The
FTSEurofirst 300 was flat at 1,096.60, having traded as
low as 1,087.50. The MSCI world equity index was
down 0.1 percent at 329.08.

“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 28.07
points, or 0.21 percent, at 13,075.61. The Standard & Poor’s 500
Index was down 4.70 points, or 0.33 percent, at 1,408.27.
The Nasdaq Composite Index was down 6.86 points, or 0.23
percent, at 2,979.25.

The S&P 500 has dropped 1.4 percent this 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.

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 0.3 percent at $607.94.

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 3.9 percent to $231.39 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.

Dow component Merck & Co Inc rose 0.7 percent to
$46.68 after the drugmaker reported better-than-expected
third-quarter profit, though overall sales came in slightly
below Wall Street’s expectations.

Brent crude was up slightly at $108.54 a barrel,
having fallen to as low as $107.40 earlier. U.S. oil
slipped to $85.90 a barrel.

In the currency market, the greenback pared losses versus
the Japanese yen. The U.S. dollar last traded at 79.92 yen
, still down 0.5 percent on the day.

U.S. Treasuries rose in price as the lackluster corporate
earnings bolstered the safe-haven allure of U.S. government
debt. Benchmark 10-year Treasury notes were trading
13/32 higher in price to yield 1.76 percent, down from 1.81
percent late Thursday and just under the 200-day moving average.

Data showed U.S. gross domestic product expanded at a 2.0
percent annual rate, accelerating from the second quarter’s 1.3
percent.