Global Markets Split Amid Corporate Earnings

Wall Street and major European stocks ended in mixed territory on Monday amid a busy weak of US corporate earnings.

Meanwhile, the dollar continued to weaken on receding expectations that the US central bank will raise interest rates again in 2017.

In New York, the tech-heavy Nasdaq had another record finish, driven up 0.4 percent in anticipation of Monday’s earnings report from Google-parent Alphabet.

The internet giant added 0.5 percent but fell after hours as the company said last month’s $2.7 billion European anti-trust fine had taken a bite out of quarterly profits.

Meanwhile, the blue-chip Dow Jones Industrial Average and broader S&P 500 were dragged lower by pharmaceutical giant Johnson & Johnson, which suffered on news of competition for a rheumatoid arthritis drug.

The Dow fell 0.3 percent and the S&P lost 0.1 percent.

After months of rallying, Wall Street equities are expensive, leaving investors looking to earnings to justify high corporate valuations.

“The companies are delivering on the earnings but investors and expecting more,” Jack Ablin of BMO Private Bank told AFP.

Elsewhere, London stocks were hit by airline sector turbulence and Frankfurt skidded lower on worries over collusion by carmakers.

London’s FTSE 100 index ended the day down 1.0 percent, with air carriers bearing the brunt after Ireland’s low-cost Ryanair posted soaring first-quarter profits but hinted at a price war.

The euro retreated from a near two-year high against the US dollar ahead of this week’s meeting of the Federal Reserve, which is expected to announce Wednesday it is leaving benchmark American interest rates untouched.

The single currency has extended last week’s rally against the greenback after European Central Bank boss Mario Draghi said policymakers would address its vast stimulus program in the autumn, fueling speculation they would start winding it in.

“The euro is generally being boosted by the belief that the ECB will announce tapering before the end of the year,” Oanda analyst Craig Erlam told AFP.

“While the Fed has openly been on a tightening path, the recent commentary has suggested the pace could slow.”

While the strong euro hurts Eurozone exporters, French stocks managed a 0.2 percent gain on the day, mainly due to a survey on private sector business activity showing a pickup in manufacturing.

Frankfurt stocks were hit by worries that German carmakers could face huge fines if allegations they colluded illegally for decades prove true.

Major Asian stocks were mixed, with the Nikkei and Hang Seng adding 0.6 and 0.5 percent, respectively, while Shanghai fell 0.4 percent.

New York – DOW: DOWN 0.3 percent at 2121,513.17 (close)

New York – S&p 500: DOWN 0.1 percent at 2,469.91 (close)

New York – Nasdaq: UP 0.4 percent at 6,410.81 (close)

Oil – Brent North Sea: UP 54 cents at $48.60 per barrel

Euro/dollar: DOWN at $1.1641 from $1.1663 at 2100 GMT Friday

Pound/dollar: UP at $1.3028 from $1.2992

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