Stocks Decline on Disappointing Earnings, Lower Oil
October 26 2016 - 10:30AM
Dow Jones News
By Mike Bird
U.S. stocks fell Wednesday as a string of disappointing earnings
reports dragged markets lower.
Crude-oil prices slumped on doubts over whether the Organization
of the Petroleum Exporting Countries would be able to reach a deal
to cut production.
Energy companies were among the worst performers. Devon Energy
fell 2.2%, Newfield Exploration dropped 1.3% and Marathon Oil lost
1.1%.
U.S. crude declined 1.9% to $49.01, but prices remain higher
than they were at the end of September, when the Organization of
the Petroleum Exporting Countries announced in Algiers a
prospective deal to cut output.
Chipotle Mexican Grill shares slipped 6.8%, a day after the
burrito chain reported same-store sales fell more than expected and
its profit slumped 95% in the third quarter. Apple, which posted
its first annual revenue decline in 15 years on Tuesday, fell
3.5%.
The Dow Jones Industrial Average dropped 91 points, or 0.5%, to
18078 shortly after the opening bell. The S&P 500 declined
0.5%, and the Nasdaq Composite fell 0.6%.
Bond yields in developed markets picked up. The yield on the
10-year Treasury note was recently 1.784%, according to Tradeweb,
compared with 1.758% Tuesday. German 10-year yields rose to 0.08%,
from around 0.02% on Tuesday.
Elsewhere around the globe, stocks mostly fell.
The Stoxx Europe 600 index pulled back 0.8%. The U.K.'s FTSE 100
index dropped 1.2% and Germany's DAX declined 1%.
Consumer confidence data from Germany issued early Wednesday
showed slightly weaker sentiment than expected at 9.7, its lowest
reading since June and below the 10 that analysts had forecast.
"Despite a somewhat more downbeat outlook for personal finances,
consumers assessed that economic prospects had improved, with the
relevant indicator rising to the highest level in more than a
year," said Mantas Vanagas, economist at Daiwa Capital Markets
Europe.
Meanwhile, French consumer sentiment in October, recorded by
statistical agency INSEE, showed the joint-strongest confidence
level since 2007. The index rose to 98, but was still below 100,
the long-term average level since 1987.
Asian stocks closed broadly lower, with Hong Kong's Hang Seng
down 1%. Japanese equities bucked the trend with the Nikkei Stock
Average closing up slightly.
The British pound bounced back against the dollar and was
recently up 0.3% at $1.2222 after falling Tuesday.
"With the terms and conditions of the U.K.'s future trade links
still unclear it is too early to rule out further downside risks in
sterling," said Geoffrey Yu, head of UBS Wealth Management's U.K.
investment office. Mr. Yu believes sterling could fall to as low as
$1.10 temporarily over the next year.
Write to Mike Bird at Mike.Bird@wsj.com
(END) Dow Jones Newswires
October 26, 2016 10:15 ET (14:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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