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Weaker corporate outlook knocks stocks on Wall Street

Stocks on Wall Street have slipped as discouraging corporate guidance stoked fears of slowing economic growth.Disappointing second-quarter revenue reports and weak third-quarter guidance from a handful of companies helped generate worries the economic out

Nevil Gibson
Fri, 30 Jul 2010

Stocks on Wall Street have slipped as discouraging corporate guidance stoked fears of slowing economic growth.

Disappointing second-quarter revenue reports and weak third-quarter guidance from a handful of companies helped generate worries the economic outlook could weaken.

The Dow Jones Industrial Average finished 30.72 points, or 0.2%, down at 10,467.16 in a choppy session. The Dow's decline was led by a 2.5% drop in Kraft Foods and a 2% loss in Procter & Gamble after a string of disappointing quarterly reports from other consumer companies.

The Nasdaq Composite was down 0.6% to 2251.69 while the S&P 500 index was down 0.4% to 1101.53, just above 1100, which is widely viewed as a key technical level. All of the S&P 500's sectors were in the red, led by declines in utilities and consumer staples sectors.

Other markets: Europe down, Asia up

European stocks failed to hold on to gains despite a raft of impressive earnings, particularly in the telecommunications sector.

The Stoxx Europe 600 telecoms index added 1.5% after a spate of earnings from some of the industry's leading blue chips. But the sector's gains weren't enough to overcome weakness in the household goods and food & beverages sectors,

The Stoxx Europe 600 index closed down 0.4% at 256.26, falling within the last hour of the trading session. The UK's FTSE 100 ended down 0.1% at 5313.95, Germany's DAX finished down 0.7% at 6134.70 and France's CAC-40 closed 0.5% lower at 3651.91.

In Asia, China's stock market, one of the world's worst performers in the first half of the year, has rebounded as government efforts to rein in the economy appears to have peaked.

The benchmark Shanghai Composite Index is up 11% from its 2010 low on July 5, including a 2.3% gain on Wednesday to 2633.66, its highest close in two months.
During the first six months of this year it fell about 27% amid fears that the biggest engine of global growth was cooling.

Japan's Nikkei Stock Average dropped 0.6% to 9696.02, giving back a portion of Wednesday's strong gains.

Other Asian markets were mixed in narrow ranges. Australia's S&P/ASX 200 slipped 0.1% to 4524.07 and Hong Kong's Hang Seng Index edged down 2.64 points to 21093.82, after rising for seven consecutive days.

Commodities: Oil up, gold down

Crude futures pushed higher as strength in European economic data put pressure on the US dollar. Light, sweet crude for September delivery traded up $US1.06, or 1.4%, at $US78.04 in New York, after rising as high as $US78.89.

Brent crude on the ICE futures exchange traded $US1.60 higher at $US77.60 a barrel. Crude futures have moved conservatively in recent days, settling between $US76 and $US79 a barrel in 10 of the past 11 trading sessions.

Gold futures were essentially flat, trading around three-month lows, as investors continued to lighten their holdings of the metal in favor of equities. The most actively traded gold contract, for December delivery, was down 30USc at $US1162.10 an ounce in New York.

Currencies: Euro up, dollar down

The euro rose above $US1.31 to the highest point in 11 weeks as improving euro-zone economic data helped it extend a rally during which it has strengthened more than 10% since early June.

After hitting a four-year low of $US1.1876 on June 7, the euro has steadily advanced amid confidence that policy makers have forestalled a European sovereign-debt default. The euro was at $US1.3071, compared with $US1.2986 late on Wednesday, after climbing as high as $US1.3106.

The dollar weakened to ¥86.67 from ¥87.46. The euro weakened to ¥113.30 from ¥113.57. The UK pound was unchanged at $US1.5585.

Nevil Gibson
Fri, 30 Jul 2010
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Weaker corporate outlook knocks stocks on Wall Street
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