Global shares falter, but U.S. stocks, euro gain
NEW YORK (Reuters) - Global stocks faltered on Monday on weak corporate results and outlooks, while the euro gained after a regional vote in Spain was seen as moving a solution to the euro zone debt crisis one step closer.
U.S. stocks eked out gains in a late-day rally that was helped by a 4 percent gain in Apple Inc, which reports earnings later in the week. The tech heavyweight provided the biggest boost to the benchmark S&P 500 index.
Trading also was influenced by heavy-equipment maker Caterpillar Inc (CAT.N) after it slashed its 2012 forecast and warned that the global economy was slowing more quickly than it had expected.
Caterpillar's outlook helped oil prices to retreat and put the S&P 500 on track for almost the entire session for a third straight decline after it suffered its worst one-day fall since late June on Friday. But the S&P closed 0.04 percent higher after the surge in Apple.
Peter Kenny, a managing director at Knight Capital in Jersey City, New Jersey, said with 15 days to go until the U.S. presidential election on November 6, investors are hesitant, with the economy close to a stall and the euro zone still a concern.
"It's more of a wait-and-see. Once we have some clarity on the political front, I think people are going to be more than willing to put some bets on the table," Kenny said.
Of the 123 S&P 500 companies that have reported results, 60.2 percent have topped analysts' expectations for earnings. But 61 percent have missed revenue forecasts, according to Thomson Reuters data.
"The majority of earnings so far have been on the weak side and a number of high-profile companies have issued profit warnings, making investors a little more cautious about the outlook for profits in 2013," said Michael Sheldon, chief market strategist at RDM Financial, in Westport, Connecticut.
The Dow Jones industrial average .DJI closed up 2.38 points, or 0.02 percent, at 13,345.89. The Standard & Poor's 500 Index .SPX rose 0.62 point, or 0.04 percent, at 1,433.81. The Nasdaq Composite Index .IXIC climbed 11.33 points, or 0.38 percent, at 3,016.96.
Shares of Caterpillar, considered a bellwether for the economy, rose and fell in rocky trade. Caterpillar closed up 1.5 percent at $85.08.
"Caterpillar is a cyclical stock, and there's always a battle between a slowdown in the economy and growth expectations," said Shawn Hackett, president at Hackett Financial Advisors in Boynton Beach, Florida. "The stock is extremely volatile during periods when the economic outlook is uncertain."
Caterpillar's lowered outlook helped push European shares lower as it echoed other corporate views in recent weeks. By the European market close, all STOXX Europe 600 .STOXX sectors except financials were negative.
The news from the U.S. heavy equipment manufacturer "is being treated as more macro than just a set of company results, and with a lack of other news flow today, I think people are being cautious on the back of it," said Will Hedden, a trader at IG Markets.
In Europe, the FTSEurofirst 300 index .FTEU3 of top European shares fell 0.4 percent to close at 1,107.42. The STOXX Europe 600 fell 1.1 percent.
European shares earlier had traded higher on renewed expectations Spain was moving closer to seeking a bailout, but the decline in U.S. equity markets pulled Europe down.
The euro rose after Spanish Prime Minister Mariano Rajoy's party retained an absolute majority in the parliament of his home region of Galicia on Sunday, a result seen as overcoming a hurdle to Spain's formally requesting a bailout.
According to European officials and analysts, Rajoy had wanted to wait until the election results. A bailout request would trigger the European Central Bank's bond-buying program aimed at lowering Spain's high borrowing costs.
The euro was up 0.3 percent against the dollar at 1.3055. The U.S. dollar index .DXY fell 0.03 percent to 79.594.
Oil prices edged lower in choppy trading as economic concerns, in addition to expected production and pipeline restarts, offset fears about Middle East turmoil and the potential threat to the region's supply.
The Caterpillar warning, along with data showing tumbling Japanese exports, weighed on crude oil, pushing Brent to below $110 per barrel.
Brent crude for December delivery fell 70 cents to settle at $109.44 per barrel. U.S. oil settled down $1.32 at $88.73 a barrel.
U.S. Treasury prices slipped, erasing some of Friday's gains, as investors pressured prices before the sale of $99 billion of U.S. government debt this week.
The benchmark 10-year U.S. Treasury note was down 14/32 in price to yield 1.8134 percent.
(Reporting by Herbert Lash, Additional reporting by Richard Hubbard; Editing by Dan Grebler and Kenneth Barry)