By Chuck Mikolajczak
NEW YORK (Reuters) -A gauge of global stocks was lower for a third straight session on Friday, as investors digested the latest round of corporate earnings, while longer-dated U.S. yields fell on growing concerns about a Federal Reserve poised to hike interest rates in a slowing economy.
On Wall Street, the S&P 500 held near the unchanged mark, with the consumer staples sector, up 0.62%, as Procter & Gamble climbed 3.54% as the maker of products such as toothpaste and laundry detergent beat quarterly estimates and raised its sales outlook.
But the materials sector was weak, down 1.25%, as Albermarle stumbled 4.65% after Chile announced plans to nationalize its lithium industry.
Of the 88 S&P 500 companies that have reported quarterly earnings through Friday, 76.1% have topped expectations, according to Refinitiv data, well above the 66% average since 1994 and slightly better than the 74% over the past four quarters.
Earnings are expected to decline 4.7% from the year-ago period, an improvement from the 5.1% decline seen on April 1.
“Investors are OK with earnings so far because the lack of bad news is good news,” said Adam Sarhan, chief executive of 50 Park Investments. “The market is waiting to see if we can get some bullish earnings over the next few weeks from some of the big-cap tech stocks.”
The Dow Jones Industrial Average fell 73.29 points, or 0.22%, to 33,713.33; the S&P 500 lost 13 points, or 0.31%, to 4,116.79; and the Nasdaq Composite dropped 56.84 points, or 0.47%, to 12,002.72.
Earnings from megacap names such as Microsoft Corp and Google parent Alphabet Inc are scheduled for next week.
Equities showed little reaction to economic data from S&P Global’s flash U.S. Composite PMI Output Index, which said U.S. business activity accelerated to an 11-month high in April.
The pan-European STOXX 600 index rose 0.15% and MSCI’s gauge of stocks across the globe shed 0.39%. MSCI’s index was on track for a third straight session of declines, it’s longest streak in nearly six weeks.
Economic data in the euro zone also showed the region’s economic recovery unexpectedly gained steam this month, with HCOB’s flash Composite Purchasing Managers’ Index climbing to an 11-month high.
Economic data this week has largely pointed to a slowing U.S. economy, although comments from a host of Fed officials have indicated the central bank is still likely to hike by 25 basis points at its May meeting. Markets are currently pricing in an 86% chance of a 25 basis point hike at the May policy announcement, according to CME’s FedWatch Tool.
While stocks showed little reaction to the PMI data, U.S. Treasury yields moved higher.
The yield on 10-year Treasury notes was up 1.5 basis points to 3.560%.
The two-year U.S. Treasury yield, which typically moves in step with interest rate expectations, was up 1.4 basis points at 4.184%.
The dollar was headed for its first weekly gain in nearly two months as investors raised their bets on the Fed increasing borrowing costs next month.
In currencies, the dollar also strengthened on the heels of the PMI report with the dollar index rising 0.157% and the euro down 0.05% to $1.0961. The greenback was on track for its first weekly gains after five straight declines, its longest weekly run of weakening in nearly three years.
The Japanese yen weakened 0.05% versus the greenback to 134.31 per dollar, while Sterling was last trading at $1.2394, down 0.39% on the day.
Crude prices were up modestly on the day, but poised for weekly declines, as concerns about rate hikes and a looming recession weighed.
U.S. crude recently rose 0.59% to $77.83 per barrel and Brent was at $81.55, up 0.55% on the day.
(Reporting by Chuck Mikolajczak; additional reporting by Sruthi Shankar and Ankika Biswas in Bengaluru; editing by Jonathan Oatis)
Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibilty for its content.