Traders work on the floor of the New York Stock Exchange (NYSE) on Oct. 24.Brendan McDermid/Reuters
A barrage of uninspiring outlooks from bellwethers including Apple Inc. and Bayer AG sent global equities down as energy shares slumped with crude.
The MSCI All Country World Index was on pace for its worst monthly rout since January as oil resumed its slide after a government report showed that the unexpected drop in U.S. stockpiles was centred on the West Coast. Italian bonds led losses in the Euro area amid a glut of supply from governments and companies, while Gilts slumped on speculation that further U.K. monetary easing is unlikely. The shared currency rose against most of its 16 major peers amid economic growth signs.
Equities have failed to gain momentum since Alcoa Inc. unofficially kicked off the U.S. earnings season earlier this month as traders grapple with mixed outlooks from some of the world's largest companies. Meanwhile, investors assessed the likely trajectory of interest rates and the outcome of the American presidential elections, with the next Fed meeting and the vote both due in November.
"Apple earnings were probably in line with expectations, but nevertheless are going to subtract from the S&P," said Bruce Bittles, chief investment strategist at Milwaukee-based Robert W. Baird. "The markets typically trade defensively in October before an election anyway, I expect more of the same. The market is going to go lower before it goes higher. It's going to require a springboard and that springboard requires slightly lower prices."
MSCI's global gauge of equities was down 0.3 per cent in New York, extending this month's losses to 1.4 per cent.
Canadian stocks finished lower for a third day as disappointing corporate results raised concern about the strength of the nation's economy.
Canadian National Railway Co. fell the most since April amid concern its margins may contract. The slump sent industrial shares to a 1.4-per-cent retreat. DH Corp.'s results sent the financial-technology company to its biggest loss on record, dragging technology shares lower. Energy producers slipped with crude.
The S&P/TSX Composite Index fell 0.42 per cent, or 63.07 points, to 14,807.56 in Toronto. The index has fallen 0.9 per cent over three days after closing at a 15-month high on Friday. The slump comes with the gauge higher by 14 per cent in 2016, the top performance among developed equity markets tracked by Bloomberg.
Six of the index's 10 main groups fell Wednesday. DH plunged 43.4 per cent to a four-year low. Shares fell after third quarter earnings missed the lowest estimates and the company provided a cautious outlook for 2017. DH was downgraded by five research firms after the disappointing results.
U.S. stocks retreated amid a disappointing forecast from Apple Inc. and as a plunge in Edwards Lifesciences Corp. dragged health-care shares lower, overshadowing a rally in Boeing Co. and among banks.
Equities reversed direction in afternoon trading as energy producers faded with crude oil and health-care companies extended losses. Edwards Lifesciences dropped the most in three years after its sales missed estimates, while Apple slid 2.3 per cent, weighing on the technology group as its holiday sales outlook was a letdown. Countering declines, Boeing Co. jumped the most in a year following its report, and the KBW Bank Index rose to its best level this year as Treasury yields approached June highs.
The S&P 500 Index unofficially fell 0.17 per cent, or 3.73 points, to 2,139.43 in New York, after briefly erasing a 0.5-per-cent slide when crude oil wiped out losses on signs of lower supplies. The benchmark renewed declines as oil once again lost momentum.
The Dow Jones Industrial Average added 30.20 points, or 0.17 per cent, to 18,199.47. The Nasdaq Composite Index dropped 33.13 points, or 0.63 per cent, the most in two weeks, to 5,250.27.
"It's not common to see the Dow, the S&P, and the Nasdaq performing in such disparate ways," said Brian Jacobsen, chief portfolio strategist with Wells Fargo Funds Management LLC, which oversees $242-billion. "Only 4 per cent of the time have we seen the Dow outperform the S&P and the S&P outperform the Nasdaq by these margins. It's typically driven by just a handful of names or sectors sticking out like sore thumbs, so it's important to not assume the Nasdaq is telling us something the Dow or the S&P are missing. Still, it's rare and rare events tend to grab our attention."
The S&P 500 hasn't climbed for more than two consecutive days for almost five weeks, unable to gain momentum during an earnings season dappled with disappointing forecasts from Intel Corp. to 3M Co. and Apple. While 78 per cent of companies that have reported so far beat profit forecasts and 62 per cent exceeded revenue estimates, analysts still predict third-quarter income will be flat compared to a year ago. Google parent Alphabet Inc. and Amazon.com Inc. are among those releasing results Thursday.
Oil fell to a three-week low after a government report showed an unexpected decline in U.S. crude supply was centred on the West Coast.
Nationwide crude stockpiles fell 553,000 barrels last week, according to the Energy Information Administration. Analysts surveyed by Bloomberg projected a gain and the American Petroleum Institute data showed an increase. Supplies along the West Coast decreased by 2.26 million barrels to 47.1 million, the lowest since January 2015. But the region is sometimes ignored by traders because its distribution system is isolated from the rest of the country.
"This is a sloppy market," said Adam Wise, who helps run a $7-billion oil and natural gas bond and private equity portfolio at John Hancock in Boston. "News and changes of sentiment can easily send it moving into the opposite direction. We have mixed signals from today's data."
Oil has fluctuated near $50 a barrel amid uncertainty about whether the Organization of Petroleum Exporting Countries can implement the first output cuts in eight years and get producers outside the group to join in, notably Russia. An OPEC committee will meet this week to try to resolve differences over how much individual members should pump, with Iraq saying it should be exempt because of conflict with Islamic militants.
WTI for December delivery fell 78 cents, or 1.6 per cent, to settle at $49.18 a barrel on the New York Mercantile Exchange. It's the lowest close since Oct. 4.
Brent for December settlement slipped 81 cents, or 1.6 per cent, to $49.98 a barrel on the London-based ICE Futures Europe exchange. It's the lowest close since Sept. 30. The global benchmark ended the session at a 80-cent premium to WTI.
Gold prices fell on Wednesday as investor appetite for riskier assets such as equities and crude oil recovered slightly, denting demand for bullion, often considered a safe haven.Spot gold fell 0.6 per cent to $1,265.75. In the previous session, it hit $1276.67, its highest since Oct. 5.
U.S. gold futures settled 0.5 per cent lower at $1266.60.
Earlier in the session, gold was stronger as disappointing results and forecasts from major U.S. companies continued to weigh on the European and Asian stocks. Mixed results from Europe's banking sector and declines in mining and energy shares pushed the pan-European STOXX 600 index down 0.38 per cent.
With files from Reuters