NEW YORK (Reuters) - Weak earnings dragged stocks lower on Tuesday and Apple’s results weighed U.S. futures further, while a slip in the dollar helped oil and gold cap a string of losing sessions.
Stocks on Wall Street fell, with results from bellwethers IBM and United Technologies weighing the most on the S&P 500, while Apple slumped 7 percent late after posting earnings. U.S. equity futures extended losses, pointing to a weaker open on Wednesday.
“For the first time in a while fundamentals seem to be driving the action today in an otherwise very quiet macro backdrop and probably will continue to do so for the next couple of weeks as we work through the heart of earnings season,” said Ryan Larson, head of U.S. equity trading at RBC Global Asset Management in Chicago.
Spot gold prices gave up most of the day’s gains and were up marginally after hitting a five-year low on Monday. Investors have dumped gold as the dollar rises and Greece looks to seal a bailout deal.
U.S. crude oil futures rose in choppy trading as the August contract expired, while Brent advanced but remained toward the bottom of its $55-$60 a barrel range of the past weeks, near its lowest since early April.
At Wall Street’s closing bell, the Dow Jones industrial average .DJI was down 181.12 points, or 1 percent, at 17,919.29, the S&P 500 .SPX lost 9.07 points, or 0.43 percent, to 2,119.21 and the Nasdaq Composite .IXIC dropped 10.74 points, or 0.21 percent, to 5,208.12.
Healthcare led Europe stocks lower after Novartis reported quarterly income below analysts’ expectations. The FTSEurofirst 300 index of top European shares .FTEU3 closed down 1.1 percent after rising 9.3 percent in the previous nine sessions.
MSCI’s gauge of major global stock markets .MIWD00000PUS slipped 0.2 percent.
The euro EUR= bounced back against the dollar after hitting a three-month low on Monday. It ended the New York session up 1.1 percent at $1.0936 and the dollar index .DXY, which measures the greenback against a basket of currencies, fell 0.7 percent.
“People were caught leaning too short against euro. It’s just some position-squaring,” said Richard Scalone, co-head of foreign exchange at TJM Brokerage in Chicago.
Dollar strength is seen returning in the short term on expectations of interest rate differentials, as the U.S. Federal Reserve prepares to raise rates by year-end.
“The tension is fading on the euro down there,” said David Rodriguez, quantitative strategist at FXCM in New York. “The dollar is still in control.”
Spot gold XAU= added 0.4 percent on the day to near $1,101 per ounce after earlier gaining as much as 1.2 percent.
Oil prices edged up as the U.S. dollar slipped, but were set for large monthly drops in the face of a global supply glut.
Brent crude futures LCOc1 were up 43 cents at $57.08 a barrel. U.S. crude futures CLc1 rose 21 cents to $50.36.
Crude inventories rose by 2.3 million barrels in the week to July 17, compared with analysts’ expectations for a decrease of 2.3 million barrels, according to data from industry group American Petroleum Institute. [API/S]
U.S. Treasuries prices rose as the decline in stocks fueled demand for the safe-haven.
“You’re starting to see companies that just aren’t hitting their earnings estimates, and you get this jolt down in equities and risk off and transfer of funds into the bond market,” said Justin Hoogendoorn, fixed income strategist at BMO Capital Markets in Chicago.
Benchmark 10-year Treasury notes US10YT=RR were last up 12/32 in price to yield 2.3307 percent, from 2.374 late Monday. U.S. 30-year bonds US30YT=RR were last up 24/32 to yield 3.0674 percent, from a yield of 3.106 percent late Monday.
Additional reporting by Chuck Mikolajczak, Richard Leong and Sam Forgione; Editing by Dan Grebler