European shares slid after a mixed bag of earnings from the region, while dismal reports from U.S. industrial companies including 3M pulled stocks on Wall Street lower.
The dollar rose to almost a two-year high against the euro on Thursday on an upbeat U.S. capital goods report, while world equities slid as weak economic data from South Korea and a profit warning from 3M Co renewed concerns about global growth. New orders for U.S.-made capital goods increased by the most in eight months in March, which combined with worries about the economic health of the euro zone knocked the single currency to its lowest against the greenback since May 2017.
Other data showed the number of Americans filing claims for unemployment benefits was the biggest in 19 months last week, but the trend remains consistent with a strong labor market. “The dollar is benefiting from strong domestic data, weak data abroad and a slew of dovish central bank meetings,” said John Doyle, vice president of dealing and trading at Tempus Inc in Washington. The euro fell 0.22% to $1.1127.
European shares slid after a mixed bag of earnings from the region, while dismal reports from U.S. industrial companies including 3M pulled stocks on Wall Street lower. Finnish telecom network equipment maker Nokia tumbled 9.0%, its biggest decline in 18 months. Nokia reported a surprise quarterly loss after it failed to supply 5G telecoms equipment on time.
The pan-European STOXX 600 index closed down 0.21% and MSCI’s gauge of stock performance in 47 countries shed 0.16%. On Wall Street, strong results by Facebook and Microsoft kept the tech-rich Nasdaq near record highs and offset a drop in 3M, United Parcel Service Inc and other industrials.
Facebook rose 6.4% and Microsoft Corp climbed 3.6%. The Dow industrials fell 1% at one point, dragged by a 12.9% decline in 3M shares after the company reported a lower-than-expected quarterly profit, cut its 2019 earnings forecast and said it would lay off 2,000 workers globally.
The Dow Jones Industrial Average fell 105.47 points, or 0.4%, to 26,491.58. The S&P 500 gained 2.28 points, or 0.08%, to 2,929.53 and the Nasdaq Composite added 25.19 points, or 0.31%, to 8,127.21. Asian markets slid earlier in the day, losing 0.5% as South Korea’s economy unexpectedly contracted in the first quarter, a reminder of economic fragility outside the United States.
Shanghai’s bourse also fell late in the day, losing more than 2% on the latest central bank efforts to temper expectations for further monetary policy easing. Chinese officials also warned of protracted pressure on economic growth, casting a shadow over hopes for a sustained recovery in the world’s second-biggest economy. The dollar index, which measures the greenback versus a basket of six major peers, held near its highest level since May 2017. The index was up 0.1%.
The Japanese yen strengthened 0.48% versus the greenback at 111.63 per dollar. The Turkish lira weakened 0.95% against the dollar after Turkey’s central bank left interest rates unchanged at 24% but in a dovish shift dropped a previous reference to possible further tightening if needed to address inflation.
U.S. Treasury yields rose as investors piled into the safe-haven government bonds following a dovish report from Canada’s central bank and solid demand at auction for $41 billion of new five-year notes. Benchmark U.S. Treasury 10-year notes fell 3/32 in price to push yields up to 2.5325%.
Brent oil slid late in the session after rising above $75 per barrel for the first time this year as quality concerns forced the suspension of some Russian crude exports to Europe while the United States prepared to tighten sanctions on Iran. Brent crude futures settled down 22 cents at $74.35 a barrel. U.S. crude fell 68 cents to settle at $65.21. U.S. gold futures settled unchanged at $1,279.70 an ounce.