World markets overnight: US biotech share slump continues

Stocks on Wall Street rose slightly as a number of positive quarterly earnings reports helped offset a continued decline in the biotechnology sector.

The Dow Jones Industrial Average rose 72.17 points, or 0.4%, to 18,110.14 and the S&P 500 gained 5.84 points, or 0.3%, to 2114.76.

The Nasdaq Composite Index slipped 4.82 points to 5055.42.

A jump in Merck shares helped lift indexes. Merck raised its earnings guidance for the year as its first-quarter results declined less than expected. Shares rose 5.4%, adding 20 points to the Dow.

Apple shares slipped despite a 33% jump in second quarter profit to $US13.57 billion after selling 61.2 million iPhones, up 40% on a year earlier.

The Nasdaq Biotechnology index fell 0.7% and is down 4.7% already this week after outpacing broader market gains this year. Up to last Friday, it was up about 20% for the year.

International markets
European stocks fell as some patchy corporate earnings encouraged investors to pull back from a market that has rallied sharply this year.

The Stoxx Europe 600 closed 1.5% lower but is still up 18.6% for the year. Healthcare stocks on the index led declines, falling 2.5%, in response to Monday’s steep decline in US biotech stocks.

Germany’s DAX index fell 1.9%, France’s CAC 40 lost 1.8%, while the UK’s FTSE 100 slipped 1.0%.

In Asia, China shares fell sharply after the  securities regulator issued a fresh warning to investors on the market’s risks while, in Australia, weakness in mining shares pushed the benchmark further away from the 6000 mark.

The Shanghai Composite index closed 1.1% lower at 4476.22 and Hong Kong’s Hang Seng Index finished flat at 28,422.75.

Australia’s S&P/ASX 200 ended down 0.6%, at 5948.5, moving further away from 6000, a level last breached in January 2008.

Japan’s Nikkei Stock Average closed up 0.4% at 20,058.95, despite Fitch Ratings cutting its appraisal on official debt by one notch to single A with a stable outlook.

Commodities and currencies
Gold prices notched a three-week high, as investors awaited the result of the US Federal Reserve’s two-day monetary policy meeting.

Gold for June delivery, the most actively traded contract, closed 0.9% up to $US1213.90 an ounce in New York.

Oil prices were nearly flat, retreating from earlier gains on news Iranian warships had seized a US cargo ship.

Light, sweet crude for June delivery was up 7USc, or 0.1% at $US57.06 a barrel. Brent crude, the global benchmark, was down 19USc, or 0.3%, at $US64.64 a barrel.

In currency markets, the dollar fell against the euro and the UK pound. The euro was up 0.9% at $US1.0972 and sterling rose 0.7% to $US1.5326.