DJI-NEW YORK, Oct 19 (Reuters) - World
stocks and crude oil fell on Friday as investors took a dim view of U.S.
corporate earnings after General Electric and McDonald's disappointed, while Europe's
debt crisis and ongoing concerns about global growth also weighed on sentiment.
The dollar climbed against the euro
and the yen as a perceived lack of progress on a Spanish bailout request
reminded investors of the headwinds facing the world economy.
Gold fell more than 1 percent, its
biggest one-day slide in more than three months, as bullion was hit by
technical selling and the decline on Wall Street, which erased most of the
week's gains.
The CBOE Volatility Index the so-called fear gauge, jumped 13.5 percent to 17.06, its highest level since
Sept. 5.
The stock market sell-off occurred
on the 25th anniversary of the Black Monday crash of 1987, when the Dow
plummeted 22.6 percent - its worst single-day percentage loss ever.
"This sell-off is definitely
earnings-driven but there is also an element of profit taking after several
strong days," said Andrew Wilkinson, chief economic strategist at Miller
Tabak & Co in New York.
Revenue missed analysts'
expectations at GE due to unfavorable exchange rates, while
McDonald's profits also missed expectations because of
the weak global economy.
GE fell 3.4 percent to $22.03 and
McDonald's slid 4.5 percent to $88.72.
Of the 116 S&P 500 companies
that have reported so far in the U.S. earnings season, 60 percent have exceeded
analysts' estimates, a rate lower than the 67 percent pace of the previous four
quarters, according to Thomson Reuters data.
The Dow Jones industrial average was down 205.43 points, or 1.52 percent, at 13,343.51. The Standard &
Poor's 500 Index was down 24.15 points, or 1.66 percent, at
1,433.19. The Nasdaq Composite Index was down 67.24 points, or 2.19 percent, at 3,005.62.
"We've had a nice run up and
you start seeing these earnings miss. It may be time to take some money off the
table," said Larry Peruzzi, senior equity trader at Cabrera Capital
Markets Inc in Boston.
European shares snapped a four-day
winning streak as signs of disagreement among European Union leaders over how
to help the region's debt-ridden banks hit financial stocks.
Equities in Europe might be prone to
a bigger fall because of the perceived lack of progress in finding long-lasting
solutions to the euro zone debt crisis, said Luc Bocahut, a portfolio manager
at Monaco-based Tiverton Trading.
"I would be quite bearish here.
They really haven’t made much progress,” Bocahut said.
U.S. stocks extended their slide to
more than 1.5 percent as earnings from large multinationals underscored the
effect of the global economic slowdown.
MSCI's all-country world equity
index was down 1.3 percent at 333.96.
In Europe, the FTSEurofirst 300
index of leading regional companies closed down
0.8 percent at 1,111.85, while the pan-regional Euro STOXX 50 closed down 1.24 percent at 2,542.24.
The euro slipped against the dollar
as a perceived lack of progress on a Spanish bailout request curbed demand.
Risk appetite also eased on a report showing U.S. home resales fell in
September, a reminder that America's housing sector is a long way from a full
recovery.
The euro was last down 0.3 percent at $1.3021, close to a session low of $1.3018.
U.S. Treasury prices edged up as
selling pressure that has hurt the market the past four days subsided. Recent
stronger U.S. economic data and hopes that European leaders are taking steps to
resolve their debt crisis caused a dramatic jump in Treasuries yields this week
amid heavy selling of the debt.
The market is also pricing in an
expectation that the U.S. Federal Reserve will start raising rates in 2014,
instead of 2015, for the first time since Fed Chairman Ben Bernanke’s speech in
Jackson Hole in August, said Jim Vogel, interest rate strategist at FTN
Financial in Memphis, Tennessee.
“The question everyone is asking is
'Was QE3 even necessary?' given that we are already seeing evidence of a nice
third-quarter rebound,” he said.
The benchmark 10-year U.S. Treasury
note was up 18/32 to yield 1.7677 percent.
Brent and U.S. crude futures fell
more than 1 percent on concerns about the European debt crisis, a stronger
dollar and the decline in equity markets.
December Brent crude oil futures slid $2.28 to settle at $110.14 a barrel. U.S. crude settled down $2.05 at $90.05 a barrel.
U.S. COMEX gold futures for December delivery settled down $20.70 an ounce at $1,724.
Spot gold was down 1.2 percent at $1,720.80 an ounce.
NYMEX- NEW YORK, Oct 19 (Reuters) - U.S.
crude futures fell more than 2 percent on Friday, pressured by revived concerns
about the global economy and expectations that a pipeline moving Canadian crude
oil to the United States will restart on schedule.
SOYBEAN- Soybean futures on the Chicago Board of Trade
fell nearly 1 percent
on Friday as concerns about the global economy lifted the
dollar and prompted investors to exit riskier assets including
commodities, traders said.
* Investors took a dim view of U.S.
corporate earnings after General Electric and McDonald's disappointed, while a
perceived lack of progress on a Spanish bailout request reminded investors of
the headwinds facing the world economy.
- Front-month soybeans hit a high for the week at
$15.55-3/4 before turning lower.
- Additional pressure, especially in deferred contracts,
stemmed from Informa Economics raising its forecast of U.S. 2013 soybean
plantings to 79.987 million acres, which if realized would be the most on record.
- For the week, soybeans held gains, rising 0.7 percent to snap a four-week slide. Soymeal ended the week down 2.1 percent, its sixth drop in seven weeks, while
soyoil ended the week up more than 3 percent,
halting a four-week skid.
- Argentina's 2012/13 soybean harvest could reach a
record high of between 55 million and 58 million tonnes if weather
conditions remain favorable, Agriculture Secretary Lorenzo Basso said.
- Showers will likely taper off in Brazil's soy belt in
coming days and keep rains below average for October as farmers aim for a
record soybean harvest, local forecaster Somar said.
- A cold front formed over southern Brazil earlier this
week and will bring torrential rains to No. 3 soy state Rio Grande do Sul
on Sunday, likely impeding planting. But warmer Atlantic Ocean waters are
preventing those rains from moving north into top soy state Mato Grosso.
FCPO- KUALA LUMPUR, Oct 19 (Reuters) -
Malaysian palm oil futures rose on Friday, with market players confident of a
recovery in demand thanks to strong Malaysian exports in the first half of the
month and a major festival next month.
"There are more purchases from
India and China - India especially - because Deepavali is coming soon. They
need to stock up more on palm oil," said Malaysia's Public Investment Bank
analyst Chong Hoe Leong, referring to the Hindu festival of lights set for Nov.
13.
"The current crude palm oil
price is quite attractive for purchase because it's at the low base," he
said, but warned that inventory levels are expected to stay consistently high
for the remainder of the year.
At the close, the benchmark January
contract on the Bursa Malaysia Derivatives Exchange
rose 0.2 percent to 2,501 ringgit ($820) per tonne. Prices have lost more than
21 percent so far since the start of the year.
Total traded volumes stood at 27,875
lots of 25 tonnes each, just slightly higher than the usual 25,000 lots.
For the week, the edible oil was
almost flat, as concerns over record stocks offset expectations of stronger
demand.
Market players will be watching out
for exports numbers for Oct. 1-20 to further gauge demand trend, after both
cargo surveyors reported an increase in exports for the first half of the
month.
Despite hopes for an improved
exports trend, analysts say inventories, which hit a record high in September,
remain worrying as palm oil production shows no signs of slowing, and Malaysia
struggles to push out shipments quicker amid weaker global economic growth.
"For next year, it is a bit
challenging for palm oil because we can see a slowdown in market activity
especially in the major consuming countries," Chong said.
"That will be the major concern
for the palm oil market, despite Malaysia recently imposing a lower tax
structure starting from next year," he added, referring to the tax cut
from the current level of 23 percent per tonne.
In a bullish sign for palm oil,
Brent crude futures held steady at above $112 a barrel on Friday, but analysts
and traders said a move to the downside was likely because the UK's Buzzard
oilfield was expected to restart this weekend while the demand outlook remained
weak.
In other vegetable oil markets, U.S.
soyoil for December delivery fell 0.2 percent in late Asian trade. The most-active May 2013 soybean oil
contract on the Dalian Commodity Exchange were
almost flat.
REGIONAL EQUITY- BANGKOK, Oct 19 (Reuters) -
Southeast Asian stock markets ended weaker to flat on Friday as investors
cashed in on earlier gains in regional large caps and banks amid global market
weakness, while Thailand was led down by telecom shares such as Advanced Info
Service.
Jakarta's Composite Index ended down 0.6 percent at 4,331.25, coming off an all-time closing high of
4,356.96 set on Thursday. It still rose 0.6 percent on the week, in line with
modest gains in other markets of the region.
Malaysia's main index edged up 0.06 percent at 1,666.35, topping Thursday's record close of 1,665.42.
In Bangkok, profit-taking hit
telecoms stocks, with market leader Advanced Info Service off 0.5 percent.
Total Access Communication,
the No. 2 telecoms company, fell 0.8 percent and its Singapore-listed shares dropped 2.4 percent.
The auction for the radio frequencies
required for the long overdue introduction of faster third-generation (3G)
mobile services this week removed a key overhang on Thailand's telecoms sector,
boosting telecoms stocks and lifting the SET index above the 1,300-mark.
Banking shares were in focus this
week amid their quarterly earnings announcement. Bangkok Bank,
Thailand's biggest, fell 1.3 percent before it reported a weaker-than-expected
third-quarter net profit after market close.
