New York Stock Exchange
(Reuters) - Global shares fell on Friday as lackluster corporate earnings reports undermined investor confidence while U.S. Treasuries climbed with safe-haven support.
Although data showed a pick-up in U.S. economic growth in the third quarter, gloomy earnings and outlook statements from major global companies such as Apple and Amazon , South Korea's Samsung and Renault and Ericsson in Europe corroded hopes of a recovery in the global economy.
U.S. stocks were little changed by late afternoon trade. The day's move was largely dictated by volatile swings in Apple shares which were trading down 0.4 percent at $607.34, after falling as low as $591.00.
U.S. gross domestic product expanded at a 2.0 percent annual clip, accelerating from the second quarter's 1.3 percent. But the better-than-expected data was not enough to stem a recent slide in the market, which has caused the S&P 500 index to drop 3.3 percent over the past six sessions, its worst 6-day run in five months, according to Reuters reports.
Lighter revenues have been a concern this earnings season. Just 36.9 percent of S&P 500 companies so far have reported revenue that beat forecasts, compared with the 62 percent that typically exceed expectations, according to Thomson Reuters data.
"There's not a lot of chest-beating coming out of these (company) earnings calls. You still have caution ruling the day," said Kurt Brunner, portfolio manager at Swarthmore Group in Philadelphia.
Earnings have fared better, with 62.5 percent above expectations, almost even with the 62 percent that is historically seen.
The S&P 500 has dropped 1.6 percent this week as dismal corporate earnings and cautious outlooks, especially from large multinationals, painted a pessimistic picture of the global economy.
Adding to uncertainty was the U.S. presidential election on Nov. 6, with the benchmark S&P index below a key support level, the 50-day moving average, at around 1,434.
Many analysts expect the retreat to wane near 1,400 or 1,375, as the Federal Reserve's latest stimulus policy puts a floor under equity prices.
The Dow Jones industrial average was down 12.91 points, or 0.10 percent, at 13,090.77. The Standard & Poor's 500 Index was down 3.52 points, or 0.25 percent, at 1,409.45. The Nasdaq Composite Index was down 7.51 points, or 0.25 percent, at 2,978.61.
In Europe, shares eked out small gains on Friday with the FTSEurofirst 300 closing up 0.1 percent at 1,097.35. The MSCI world equity index was down 0.3 percent at 328.63.
Late on Thursday, Apple Inc reported a second straight quarter of disappointing results and iPad sales fell well short of analysts' targets. The company also forecast revenue and margins below Wall Street forecasts.
Prices for U.S. Treasuries rose on Friday as disappointing corporate earnings stoked safe-haven buying, with investors looking to key jobs data next week, which could affect the country's neck-and-neck presidential race.
Benchmark 10-year Treasury notes on Friday were trading 16/32 higher in price to yield 1.757 percent, down from 1.81 percent late Thursday and just below the 200-day moving average. Benchmark yields were little changed on the week after finishing late last Friday at 1.77 percent.
The U.S. government will release October's nonfarm payrolls report next Friday. Analysts said that number could not only shed light on the nascent labor market recovery but also influence an increasingly tight election for the presidency between Republican Mitt Romney and Democrat Barack Obama.
A Romney victory could be viewed as good for stocks because of tax cuts, ING economists said, with an Obama win benefiting bonds because of the possibility of ongoing Federal Reserve support for the economy and Treasuries.
Brent oil pushed higher on Friday in choppy trading, recovering from an early decline. Brent December crude edged up $1.12 to $109.61 a barrel, after falling as low as $107.40. U.S. December crude settled up 23 cents at $86.28 a barrel, recovering after falling to $85.
In the currency market, the euro traded flat against the dollar following three straight days of losses, but persistent concerns over whether Spain will ask for a bailout to address its problems and worries about Greece were expected to weigh on the currency.
A request by Spain, the euro zone's fourth-largest economy, for help would be considered a positive for the euro as it would allow the European Central Bank to start buying its bonds, which would lower borrowing costs of the highly indebted country.
The euro hit a low of $1.2881, its lowest since Oct. 11. It last traded at $1.2934, flat on the day.