Stocks fall as confidence fades; dollar advances

Bloomberg

US stocks fell as the week’s second big serving of corporate earnings did much less to reassure bulls than the previous day’s almost uniformly strong reports. The dollar and Treasuries rose.
The S&P 500 Index slid back below 2,800, heading for a second loss in three days. IBM’s disappointing results dragged the Dow Jones Industrial Average lower by more than 200 points. Netflix was the best performer in the broader measure after blowout subscriber numbers. Home Depot sank with homebuilders as housing starts missed estimates. Suppliers of auto parts led losses among retailers.
Ten-year Treasury yields remained in a tight range around 3.15 percent ahead of Federal Reserve meeting minutes, while the dollar rose the most in a week. The pound dropped after UK inflation slowed more than expected, while the euro slipped as consumer price numbers came in as expected. Oil edged downward after OPEC’s secretary general said the market will remain well-supplied.
A week after US equity markets plunged, investors have been digesting solid results from the likes of Goldman Sachs, Johnson & Johnson and Netflix. It’s still early in the earnings season but the better-than-expected numbers are welcome amid a risk-heavy global picture, which features periodic Brexit headlines, a divisive Italian budget, a lingering trade spat between the US and China and President Donald Trump’s criticism of the Federal Reserve.
While corporate results continue to arrive, the Fed will be back at the top of the agenda when the minutes of the latest policy meeting arrive later. They should offer more clues on the outlook for policy tightening into next year.
Elsewhere, emerging-market stocks struggled to build on previous day’s gains while their currencies turned lower. Turkish assets were mostly stable as the country took advantage of a lull in political turmoil to return to the dollar bond market. Earlier in Asia the mood was more upbeat, with Japanese, South Korean and Australian shares all posting strong gains. Hong Kong markets were shut for a holiday.

STOCKS
The S&P 500 Index declined 0.4 percent as of 10:10 am New York time. The Stoxx Europe 600 Index dipped less than 0.4 percent. The UK’s FTSE 100 Index climbed 0.2 percent to the highest in a week. Germany’s DAX Index sank 0.3 percent. The MSCI Asia Pacific Index jumped 0.8 percent to the highest in a week. The MSCI Emerging Market Index was little changed.

CURRENCIES
The Bloomberg Dollar Spot Index advanced 0.2 percent to the highest in a week. The euro declined 0.3 percent to $1.1536, the weakest in a week. The British pound declined 0.5 percent to $1.3119, the weakest in more than a week. The Japanese yen fell less than 0.05 percent to 112.29 per dollar, the weakest in a week.

BONDS
The yield on 10-year Treasuries decreased one basis point to 3.15 percent. Germany’s 10-year yield decreased three basis points to 0.46 percent, the lowest in more than two weeks. Britain’s 10-year yield dipped four basis points to 1.567 percent, hitting the lowest in more than two weeks with its fifth straight decline. The spread of Italy’s 10-year bonds over Germany’s rose eight basis points to 3.0461 percentage points.

COMMODITIES
West Texas Intermediate crude decreased 1 percent to $71.18 a barrel. Gold fell 0.2 percent to $1,228.60 an ounce.