Stocks Fall Amid Tech-Sector Blues While Sterling Steadies -- Update
October 12 2016 - 05:32AM
Dow Jones News
By Riva Gold
Global stocks tilted lower Wednesday amid concerns about
corporate earnings reports, while the British pound began to
stabilize from steep overnight swings.
The Stoxx Europe 600 inched down 0.1% in morning trade,
following losses in Asia and on Wall Street.
The technology sector was down 2%, leading declines in Europe,
after Ericsson AB issued a profit warning for the third quarter.
Shares in the Swedish company fell over 17% as the news came a week
it announced plans to slash almost 20% of its domestic workforce.
Nordic rival Nokia Corp. fell 4.9%.
In currencies, the British pound was last up 0.2% to $1.2277
after four consecutive days of losses sent sterling to a new
three-decade low on Tuesday.
The British currency had fallen sharply late Tuesday, but
recovered during Asian trading hours, rising more than 1.5% against
the dollar, after media reports suggested that U.K. Prime Minister
Theresa May had agreed to hold a parliamentary vote on her plans
for taking Britain out of the European Union.
Analysts said the development, if confirmed, could limit her
ability to push for a "hard Brexit." The reports spurred some
traders to temporarily lift some short of their positions on the
currency, but analysts warned that the news is unlikely to reverse
the broader downward trend for sterling.
"This many not monumentally change the political landscape,"
strategists at Nomura wrote in a note.
The WSJ Dollar index, which measures the dollar against a basket
of 16 currencies, inched down 0.1% on Wednesday after its biggest
daily gain since August.
The euro fell 0.3% against the dollar to $1.1025, while the
dollar rose 0.1% against the yen.
The yield on the 10-year Treasury note was up slightly at 1.773%
from 1.760% on Tuesday.
Futures pointed to a 0.1% opening loss for the S&P 500,
after a disappointing start to the third-quarter earnings season
spurred a selloff on Wall Street in the previous session.
Earlier, shares in Asia mostly followed Wall Street lower as
expectations rose for the Federal Reserve to raise interest rates
in December. Japan's Nikkei Stock Average fell 1.1% while the Hang
Seng Index fell 0.8%, weighed by the property sector.
Minutes from the Fed's September meeting are due later
Wednesday. Policy makers voted to leave rates unchanged but three
officials dissented in favor of an increase, so investors will
watch closely for further insight into the debate.
"We're a market that is run by central banks right now," said
Bret Chesney, portfolio manager at Alpine Global.
Fed-fund futures, used by investors to bet on central bank
policy, currently imply a nearly 70% of a rate rise in December,
according to CME Group.
Hiroyuki Kachi and
Matthias Verbergt
contributed to this article.
Write to Riva Gold at riva.gold@wsj.com
(END) Dow Jones Newswires
October 12, 2016 05:17 ET (09:17 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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