* Greenback hits two-month high versus yen
* Google shares tumble after earnings, Wall St follows
* Spanish benchmark yield hits 6-1/2 month low
By Rodrigo Campos
NEW YORK, Oct 18 Global shares dipped on
Thursday, weighed down by a late decline on Wall Street, though
a European benchmark hit a 15-month closing high as tension
surrounding the euro zone's debt crisis continued to ease.
The euro fell against the dollar but hit a five-month high
against the yen in what has been a strong run as expectations
grow that Spain will ask for financial aid before long.
U.S. stocks fell after Google shares tumbled
following its quarterly results, which were published
inadvertently and showed revenue and earnings fell short of
forecasts. The results added to caution after a rise in weekly
"It was a disappointing report and it got dumped on the
market in the middle of the day, giving people no time to sort
it out," said Peter Jankovskis, co-chief investment officer at
OakBrook Investments in Lisle, Illinois.
U.S. stocks found support earlier from Verizon
Communications after it said revenue was slightly above
expectations. Another Dow component, Travelers, posted
operating earnings that were much stronger than expected.
Risk-taking received a boost in Europe after Italy sold a
whopping 18 billion euros in its "biggest result ever for a
single bond sale" according to a Treasury spokesman, while
Spanish benchmark yields tumbled.
"The European story was what drove markets higher,"
Jankovskis said. "They're grappling toward a solution."
He added that U.S. earnings have proved somewhat better than
some people expected and that has put a floor under the market.
The Dow Jones industrial average dipped 8.06 points,
or 0.06 percent, to 13,548.94. The S&P 500 fell 3.57
points, or 0.24 percent, to 1,457.34. The Nasdaq Composite
dropped 31.26 points, or 1.01 percent, to 3,072.87.
The FTSEurofirst 300 index of top European shares
rose 0.17 percent to close at its highest since early July 2011.
An MSCI index of global stocks fell 0.1 percent, still
near a one month high.
Data showing China likely hit the bottom of a
seven-quarter-long economic downturn helped major averages in
Asia and gave support to global equities. Data for key areas
such as retail sales and industrial output did much better than
forecast, pointing toward a recovery.
DOLLAR STRENGTHENS, EURO HOLDS MOST GAINS
The dollar climbed to a two-month high against the yen after
the Federal Reserve Bank of Philadelphia said its index of
business conditions in the U.S. Mid-Atlantic region rose in
October to 5.7 from -1.9 in September, snapping five months of
negative readings that pointed to contraction.
The euro also weakened against the greenback as the U.S. job
market data overshadowed favorable demand at a Spanish bond
"The miss in weekly jobless claims undermines some of the
recent risk appetite seen in markets," said Omer Esiner, chief
market analyst at Commonwealth Foreign Exchange in Washington.
"It dashed some of the recent optimism."
The single currency fell 0.4 percent on the day to $1.3068,
not too far from Wednesday's one-month peak of $1.3139. Traders
reported large option expiries at $1.3100, which may influence
trade, keeping the euro close to that level.
A French government source said a decision in principle on a
euro zone banking union was likely to be reached at a Thursday
summit of European leaders, but further details would be
discussed later this year.
Moves to help Spain, Greece and Cyprus may come only at a
finance ministers' meeting next month, officials have told
Spanish government bond yields fell after strong demand at a
debt sale further fueled an improvement in sentiment toward the
country, which hung on to its investment-grade credit rating
Ten-year Spanish bonds yields, which exceeded
7.6 percent in late July before the ECB promised to act, eased
15 basis points on the day to 5.35 percent, their lowest in
The benchmark 10-year U.S. Treasury note was
down 2/32, its yield at 1.8273 percent.
Brent crude futures fell on the expected weekend restart of
a North Sea oilfield and the U.S. jobs data, but settled well
above session lows after news a pipeline carrying Canadian oil
to the United States had shut.
Brent December crude was down 88 cents, or 0.78
percent, at $112.34.
U.S. November crude dipped 17 cents, or 0.18 percent,
at $91.95 a barrel.