NEW YORK (Reuters) - U.S. and European stock markets were knocked lower on Wednesday by corporate earnings concerns, while U.S. bond yields rose on a combination of robust economic data and swirling speculation over who will next lead the Federal Reserve.
The Dow Jones Industrial Average and the S&P 500 suffered their worst day in seven weeks. The Dow .DJI fell 112.3 points, or 0.48 percent, to close at 23,329.46, the S&P 500 .SPX lost 11.98 points, or 0.47 percent, to 2,557.15 and the Nasdaq Composite .IXIC dropped 34.54 points, or 0.52 percent, to 6,563.89.
European shares closed lower, with a mixed batch of company results sparking profit-taking, a day before the European Central Bank is expected to signal a reduction in its bond-buying scheme, gradually withdrawing post-crisis stimulus.
The pan-European STOXX 600 closed at its lowest level in nearly four weeks, down 0.6 percent. The FTSEurofirst 300 index .FTEU3 lost 0.61 percent.
MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.02 percent higher, while Japan’s Nikkei .N225 lost 0.45 percent.
MSCI’s gauge of stocks across the globe .MIWD00000PUS shed 0.34 percent.
“The biggest driver today is profit-taking,” said Sameer Samana, a global quantitative and technical strategist at Wells Fargo Investment Institute in St. Louis, Missouri.
“We’ve had a really good year and a really good few months. For a lot of investors, as we get closer to the end of the year, taking some chips off the table is not a bad idea,” Samana said.
He added uncertainty around U.S. tax reform and global events such as Catalonia’s independence bid are unsettling for investors.
U.S. Treasury yields climbed to months-high peaks, boosted by strong U.S. durable goods and new home sales data.
Benchmark 10-year note US10YT=RR yields hit seven-month highs, with the price last down 8/32 in price to yield 2.4353 percent, from 2.406 percent late on Tuesday.
The 30-year bond yield rose to five-month peaks, US30YT=RR last losing 13/32 in price to yield 2.9437 percent, from 2.923 percent late on Tuesday.
Yields extended gains after data showing new orders for key U.S.-made non-defense capital goods rose 1.3 percent last month. Other data on Wednesday showed new single-family home sales surging nearly 19 percent to a near 10-year high last month.
Yields also rose amid speculation about President Donald Trump’s likely nominee to head the Fed. The impending decision has kept investors on edge over the direction monetary policy might take depending on whom he nominates.
The unanswered Fed leadership question also contributed to a weaker U.S. dollar.
The dollar index .DXY fell 0.11 percent, with the euro EUR= up 0.44 percent to $1.1811.
The Japanese yen strengthened 0.11 percent to 113.79 per dollar JPY=, while sterling GBP= last traded at $1.3257, up 0.94 percent on the day.
U.S. crude CLcv1 fell 0.51 percent to $52.20 per barrel and Brent LCOcv1 was last at $58.44, up 0.19 percent.
Spot gold XAU= added 0.1 percent to $1,277.41 an ounce.
Reporting by Stephanie Kelly; Additional reporting by Gertrude Chavez-Dreyfuss and Richard Leong in New York, Sruthi Shankar in Bengaluru, Danilo Masoni in Milan and Helen Reid in London; Editing by Daniel Bases and James Dalgleish