World markets overnight: US stocks fall on mixed earnings

Stocks on Wall Street declined after a mixed bag of earnings reports in one of the busiest weeks for first-quarter results.

Investors continue to focus on earnings, particularly on guidance for the rest of the year. However, there appeared to be little portfolio adjustment, with stock-trading volumes remaining below normal.

The Dow Jones Industrial Average fell 72 points, or 0.4%, to 17963 and the S&P 500 index slipped 1.3 points, or 0.1%, to 2099. The Nasdaq Composite added 22 points, or 0.5%, to 5017.

Among reports, United Technologies said its sales fell about 1% in the first quarter because of the strengthening dollar and a decline in its Sikorsky aircraft segment. Earnings beat Wall Street expectations, though revenue fell short.

DuPont Co. said the strengthening U.S. dollar will hurt its earnings for the year more than it estimated in January, though it still expects earnings to come in at the low end of its guidance. Sales declines across all of its segments. Shares declined 2.9%, making it one of the worst performers in the Dow.

IBM reported a 12% decrease in revenue, hurt by the stronger US dollar and weakness in its hardware business.

Including results from 77 companies, first-quarter earnings for S&P 500 companies are on track to fall 4.2% from a year ago. Analysts had slashed earnings estimates leading up to the reporting season, citing concerns about the strong dollar’s drag on earnings at multinational companies and the hit to energy earnings from low oil prices.

About 79% of the S&P 500 companies that have reported so far have beat those lowered earnings estimates.

International markets
In Europe, the Stoxx Europe 600 index ended just over 0.5% higher, building on Monday’s gains, while Germany’s DAX 30 added 0.4%, France’s CAC 0.1% and London’s FTSE 100 just under 0.2%.

Some robust corporate earnings offsetting jitters surrounding the future of Greece’s economy.

French advertising company Publicis Groupe was one of the strongest performing stocks across Europe with its share price gaining more than 5%, buoyed by the company reporting stronger than expected first-quarter revenue and guiding for more satisfactory growth in 2015.

Other upbeat earnings came from UK broadcaster Sky , Swedish telecom operator Tele2 AB, Dutch paint and chemicals maker Akzo Nobel  and Europe’s biggest biotech company, Switzerland’s Actelion.

In Asia, stocks in Hong Kong and Shanghai rebounded from their largest tumble of the year, while Australian shares edged higher amid signals that the Reserve Bank could soon cut interest rates.

Currencies and commodities
The euro recovered from some weakness to end the day marginally higher against the dollar at $US1.075.

Since the start of the year, the euro has fallen close to 12% against the greenback, though this move has largely been driven by dollar strength as a result of expectations the US Federal Reserve is paving the way for an interest-rate increase, while the European Central Bank continues to move in the opposite direction.

Greece’s government issued a decree requiring public bodies such as state-owned companies and public pension funds to transfer their cash reserves to the central bank as the country’s cash reserves continue to dry up.

Eurozone finance ministers are due to meet in Riga, Latvia, on Friday. However, a deal on fresh aid is unlikely to be agreed before the Eurogroup meeting on May 11, a day before Greece must pay €780 million due to the International Monetary Fund.

In commodities, gold for June delivery, the most actively traded contract, closed up 0.8% at $US1203.10 an ounce in New York.

Oil prices dropped, halting a rally that many analysts say might not be sustainable. US oil prices have risen close to 30% since a low in March on expectations the oversupplied market will come into balance later in the year.

Light, sweet crude for May delivery traded down 21USc, or 0.4%, to $US56.17 a barrel in New York. The more-actively traded June contract fell 45USc, or 0.8%, to $US57.43 a barrel. Brent, the global benchmark, recently fell 59USc, or 0.9%, to $US62.86 a barrel.