Earnings Rally Fizzles as Growth Anxiety Lingers: Markets Wrap

U.S. stocks fell as better-than-expected earnings reports from
IBM, Procter & Gamble and United Technologies did little to allay concern that global growth is slowing this year. The dollar’s six-day rally stalled and crude oil was flat after an earlier increase.

The S&P 500, Dow and Nasdaq indexes all turned lower, led by losses among energy, materials and financial companies. White House Council of Economic Advisers Chairman
Kevin Hassett said that if the partial government shutdown extends through March, there’s a chance of zero economic expansion this quarter, though “humongous” growth would follow once federal agencies reopen. Oil’s retreat weighed on energy producers and service providers.

“The broader concern that I think will continue to creep in here is, leaving trade aside, is how weak is global growth? How weak is China’s growth?” said Liz Ann Sonders, chief investment strategist at Charles Schwab & Co.

Doubts over foreign trade and politics continue to permeate global markets. White House adviser
Lawrence Kudlow said late Tuesday that negotiations between the U.S. and China next week will be “
determinative,” leaving traders on edge about the prospects for a deal. Meanwhile, the Senate is set to vote Thursday on legislation to reopen the government, though it’s
not clear that any measures will pass.

Earnings from corporate behemoths including Ford, still due on Wednesday, will give investors more to chew on.

Elsewhere, WTI oil retreated after climbing above $53 a barrel. The pound strengthened for a third day after
signs emerged that the U.K. Parliament is moving closer to a plan for delaying Brexit. The yen slid as the Bank of Japan cut its inflation outlook.

These are some events investors will be watching out for in the coming days:

Earnings season is in full swing: Texas Instruments and Ford are among companies posting results this week.
The World Economic Forum, the annual gathering of global leaders in politics, business and culture, continues in Davos, Switzerland.
There are monetary-policy decisions for the Bank of Korea and the European Central Bank, both Thursday.

And these are the main moves in markets:

Stocks

The S&P 500 Index fell 0.4 percent as of 11:52 a.m. New York time, while Nasdaq Composite Index eased 0.5 percent and the Dow Jones Industrial Average dropped 0.1 percent.
The Stoxx Europe 600 Index rose 0.1 percent.
The U.K.’s FTSE 100 Index dipped 0.8 percent.
Germany’s DAX Index fell 0.2 percent.
The MSCI Emerging Market Index rose 0.1 percent.

Currencies

The Bloomberg Dollar Spot Index fell less than 0.1 percent, the first drop in seven days.
The euro was little changed at $1.1360.
TheBritish pound increased 0.7 percent to $1.3044, the third straight gain.
The Japanese yen weakened 0.5 percent to 109.90 per dollar, the first drop in three days.

Bonds

The yield on 10-year Treasuries rose three basis points to 2.77 percent.
Germany’s 10-year yield fell less than one basis point to 0.24 percent, the first decline in three days.
Britain’s 10-year yield rose than two basis points to 1.35 percent.