Date :Tuesday, November 4th, 2014 | Time : 22:29 |ID: 15224 | Print Global shares slip on euro zone worry; oil drops on Saudi move


Global equitymarkets dipped on Tuesday and the euro firmed after a Reuters report saying central bankers in the euro zone plan to challenge European Central Bank President Mario Draghi’s leadership style.

The bankers plan to challenge Draghi over what they see as his secretive management style and erratic communication and will urge him to act in a more collegial fashion, ECB sources said.

Equities in Europe had already pared initial gains before the report after the European Commission cut its growth forecasts for the region. The commission’s new outlook indicated the euro zone economy would expand by 0.8 percent this year and need another year to reach even a modest level of growth.

The ECB, at a policy meeting on Thursday, is expected to hold off on fresh action, waiting for updated ECB staff forecasts next month and traction from its latest stimulus measures.

The euro strengthened after the report on the ECB, reaching a high of $1.2577 against the dollar as the report scaled back expectations of a loosening of ECB monetary policy. The euro was last up 0.5 percent at $1.2545.

U.S. stocks touched session lows after the report on the ECB but managed to pare declines and end trading slightly lower.

“The European Union is still the primary concern out there, because eventually a slowdown in Europe could affect large U.S. companies. So far we have not seen much influence, at least in earnings reports,” said Bryant Evans, portfolio manager at Cozad Asset Management in Champaign, Illinois.

“It’s a little bit early still, and next quarter could really be indicative of whether a slowdown in Europe is actually having an effect here.”

Energy shares weighed on U.S. equities, with the sector .SPNY down 1.9 percent on continued weakness in oil prices, as Brent crude touched a four-year low of $82.08 a barrel.

U.S. crude oil CLc1 settled down 2 percent at $77.19 a barrel, while Brent crude futures LCOc1 settled at $82.82 a barrel, down 2.3 percent after top oil exporter Saudi Arabia cut prices to the United States.

Republicans were poised to make major gains and possibly capture control of the U.S. Senate in a midterm vote that could serve as a public referendum on President Barack Obama’s job performance.

Experts expect a focus on environmental and energy issues after Tuesday’s election that could affect markets, such as a potential jump-start to energy-friendly policies that could shore up oil and gas companies.

The pan-European FTSEurofirst 300 index .FTEU3 closed down 1 percent as optimism spurred by positive corporate earnings was overshadowed by the European Commission’s reduced growth forecast and the report on the ECB.

Despite the broader economic gloom, the Europe’s corporate reporting season has not turned into the rout investors feared, with cost cuts helping to deliver earnings in line with or ahead of downbeat forecasts.

The Dow Jones industrial average .DJI rose 17.6 points, or 0.1 percent, to 17,383.84, the S&P 500 .SPX fell 5.71 points, or 0.28 percent, to 2,012.10, and the Nasdaq Composite .IXIC dropped 15.27 points, or 0.33 percent, to 4,623.64.

The MSCI all-country world equity index .MIWD00000PUS was off 0.12 percent.

Benchmark 10-year Treasury notes rose 3/32 in price to yield 2.3389 percent.

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