* European shares end flat, U.S. shares drop
* Philly Fed data the latest data implying weakness
* Crude oil rebounds after extended period of declines
* Spain sees successful debt sale on rate cut hopes
By Ryan Vlastelica
NEW YORK, April 18 Stock markets around the
world were volatile on Thursday, with U.S. stocks down following
weak data on factory activity, the latest in a series of
indicators pointing to weak growth, while Europe was flat near
its lowest levels of the year.
Early U.S. stock trading indicated a rebound following a
steep decline in Wednesday's session, but turned lower following
the data. Crude oil rebounded, though it remains sharply lower
on the week.
With the decline, U.S. shares extended their drop on the
week and the S&P broke under its 50-day moving average for the
first time this year, a signal that the market's uptrend could
be in peril. The S&P 500 is on pace to post its worst week since
June 2012, though it remains up 8.1 percent for 2013.
Meanwhile, the Dow is down 2.2 percent on the week, and up
11 percent on the year.
Growth in factory activity in the U.S. mid-Atlantic region
unexpectedly slowed in April, according to the Philadelphia
Federal Reserve, the latest in a series of data pointing to weak
"We're seeing slowing demand and lackluster economic data,
which is causing analysts and economists to revise their growth
outlooks for the year," said Mark Martiak, senior wealth
strategist at Premier/First Allied Securities in New York.
Investors also looked to the latest corporate earnings
reports for signs on the economy's strength, but results were
mixed. Verizon Communications shares surged 3.5 percent
following a better-than-expected profit while Morgan Stanley
slumped 4.7 percent as revenue from commodities trading
fell sharply. UnitedHealth Group dropped 3.7 percent as
earnings fell, pressuring insurance companies.
The Dow Jones industrial average was down 82.90
points, or 0.57 percent, at 14,535.69. The Standard & Poor's 500
Index was down 10.50 points, or 0.68 percent, at
1,541.51. The Nasdaq Composite Index was down 37.62
points, or 1.17 percent, at 3,167.05.
Europe's broad FTSE Eurofirst 300 index ended flat
near its lowest point of 2013. Frankfurt's DAX fell 0.4
percent while the Paris CAC-40 edged 0.1 percent higher.
The euro rose 0.2 percent but remained vulnerable after
falls the previous day on talk of more monetary easing by the
European Central Bank.
Earlier, Japan's Nikkei average sank 1.2 percent and
MSCI's index of Asia-Pacific shares outside Japan
fell 0.6 percent, leaving the MSCI world equity
index down 0.3 percent.
Surprisingly weak economic data from China and the United
States, and the International Monetary Fund's decision to trim
its global growth forecast, have driven the recent equity market
falls, offsetting support from easier global central bank
Some analysts say the market move is more a timely
correction after strong gains in the first quarter of the year,
when optimism over the U.S. economy lifted Wall Street stocks to
record peaks and boosted European shares to multi-year highs.
U.S. Treasury bonds gained as the soft economic data and
losses in the stock market kept up investors' demand for
safe-haven investments. The benchmark 10-year U.S. Treasury note
was up 3/32, with the yield at 1.6864 percent.
COMMODITIES STRUGGLE FOR GROUND
The prospect of lower global growth, and with it weaker
demand for goods used in industrial production, has weighed
heavily on the commodity markets where copper and oil are near
Copper, seen as a gauge for manufacturing and China-related
growth, briefly broke below $7,000 a tonne for the first time
since late 2011 but later rebounded, up 0.2 percent to $7,092 a
Investors sought bargains in oil, sending Brent crude up 1.7
percent after recently touching its lowest levels since last
July. U.S. crude was up 1.5 percent, though it remains
sharply down on the week.
Gold rose 0.8 percent, on track for its third daily
rise. Still, following a massive plunge on Monday, it is down
more than 6 percent this week.
"Investors who value physical gold over paper gold, have
viewed these low prices as a buying opportunity," said Edmund
Moy, chief strategist at gold provider Morgan Gold, adding that
sales of new gold coins from the U.S. Mint had jumped in April.
SPAIN SELLS NEW BONDS
In Europe's debt markets, investors shrugged off the growth
worries and instead focused on the likelihood they would prompt
a rate cut by the region's central bank.
The better tone allowed Spain to sell 4.7 billion euros
($6.1 billion) of new bonds at lower borrowing costs than at
recent auctions as investors snapped up the high-yielding debt.
"Today's well-received auction ... underscores the extent to
which peripheral euro zone debt markets are almost immune from
growing concerns about economic growth," said Nicholas Spiro,
managing director of consultancy firm Spiro Sovereign Strategy
German Bund futures were flat at 146.22 after the
debt sale, but were supported by the expectations of loose
central bank monetary policy.
Demand rose on Wednesday after comments from European
Central Bank policymaker Jens Weidmann, who stoked a belief that
interest rates could fall if economic data remains weak.