World stock markets lower, dollar down for fifth day vs. yen

NEW YORK Tue May 20, 2014 5:12pm EDT

1 of 6. Traders work on the floor of the New York Stock Exchange April 11, 2014.

Credit: Reuters/Brendan McDermid

NEW YORK (Reuters) - Global stock indexes fell on Tuesday after disappointing earnings and forecasts, while the dollar fell for a fifth straight session against the yen.

Retailers such as TJX Companies (TJX.N), which posted a lower-than-expected quarterly revenue, were among the biggest percentage decliners on the S&P 500.

U.S. Treasuries yields dipped after New York Federal Reserve President William Dudley said the central bank will likely be slow in raising interest rates.

A persistent fall in U.S. Treasury yields, reflecting uncertainty about global economic growth, has undermined the dollar.

The greenback could fall further against the yen if the Bank of Japan does not expand its asset purchase program.

On Wednesday, the Japanese central bank is widely expected to keep its policy unchanged, but the market will be focused on BoJ Governor Haruhiko Kuroda's news conference.

"A greater deviation in the policy outlook may trigger a further decline in the exchange rate," said David Song, currency analyst at DailyFX, a unit of FX broker FXCM in New York.

Wednesday also brings minutes from the last Fed policy meeting, which could shed light on the likelihood and timing of rate rises. Fed Chair Janet Yellen said in March that the central bank could raise rates six months after its bond-buying program ended.

MSCI's all-world equity index .MIWD00000PUS, which tracks shares in 45 nations, was down 0.5 percent, while European shares .FTEU3 closed down 0.1 percent.

Shares of Britain's Vodafone (VOD.L) fell after the company said next year's earnings would be hit by investment in its network, as it reported lower 2014 results due to writing down the value of European operations.

On Wall Street, the Dow Jones industrial average .DJI fell 137.55 points or 0.83 percent, to 16,374.31, the S&P 500 .SPX lost 12.25 points or 0.65 percent, to 1,872.83 and the Nasdaq Composite .IXIC dropped 28.92 points or 0.7 percent, to 4,096.89.

Shares of TJX tumbled 7.6 percent to $53.95 while the S&P retail index .SPXRT lost 1 percent.

MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS slipped 0.4 percent after Thailand declared martial law after months of unrest.

AUSSIE SLUMPS

The dollar fell 0.2 percent to 101.29 yen. The pair also traded below its 200-day moving average - a key technical gauge - for a second straight day.

The Australian dollar, meanwhile, fell to a two-week low against the greenback, hurt by a slide in prices of iron ore, the country's biggest export earner. Late on Tuesday, the Australian currency slid 0.8 percent to US$0.9254, after earlier dropping to US$0.9251, its lowest since May 5.

Benchmark 10-year U.S. Treasury note prices were up 6/32 to yield 2.512 percent, from 2.536 percent late Monday.

Brent crude rose 32 cents to settle at $109.69 a barrel, supported by instability in Libya, while U.S. crude futures slipped 17 cents to settle at $102.44.

Platinum group metals rose as South Africa's longest and costliest miners' strike continued. Spot platinum was up 0.1 percent at $1,464.75 an ounce.

(Additional reporting by Gertrude Chavez-Dreyfuss in New York; Editing by Dan Grebler and James Dalgleish)