Stocks, oil falter on view on China economy
By Leah Schnurr
NEW YORK (Reuters) - World shares and oil prices fell on Monday on worries about dim growth prospects for the global economy and on expectations for a weak U.S. corporate earnings reporting season.
Jitters over the euro zone debt crisis knocked the euro down from two-week highs with uncertainty about Spain persisting after a euro zone finance ministers meeting in Luxembourg said the country did not yet need a bailout.
The lackluster tone in markets was set early after the World Bank cut its growth expectations the East Asia and Pacific region, including economic powerhouse China.
Heading into the U.S. third quarter corporate earnings reporting season - which starts on Tuesday with a report from Alcoa AA.N - analysts forecast earnings will fall 2.4 percent from the year-ago quarter
That would mark the first decline in three years and make it difficult to justify keeping U.S. stocks near recent peaks.
Recent warnings from large multinationals such as FedEx Corp FDX.N, Hewlett-Packard Co HPQ.N and Caterpillar Inc CAT.N have already made investors wary.
On Wall Street, equities trading volume was the lowest so far this year on Monday as the U.S. government and the bond market were closed for the Columbus Day holiday.
"Certainly there have been a lot of downward revisions in earnings in general," said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois. "Some people are predicting that we may see an overall decline in earnings, so there may be some defensive posturing and profit-taking." Continued...