* MSCI World down 0.4 pct amid fears of weak U.S. earnings
* Euro up for 4th day vs. dollar, helped by ECB's Nowotny
* Greenback bounces off two-week low vs basket of currencies
By Francesco Canepa
LONDON, Jan 14 Global shares fell on Tuesday as
weak earnings pre-announcements in the United States fuelled
worries that the upcoming reporting season may disappoint,
leaving some indexes looking expensive after a bumper 2013.
The dollar steadied against a basket of six major currencies
, bouncing from its lowest level since Jan. 2 after a
two-day drop sparked by much a weaker-than-expected U.S. jobs
number on Friday.
All major European stock indexes fell after a batch of U.S.
companies posted weak earnings or forecasts on Monday.
Underscoring concerns, JPMorgan Chase reported
lower-than-expected earnings per share on Tuesday, sending its
shares slightly lower in pre-market trade.
Almost 10 of every 11 earnings pre-announcements for the
current earnings season from companies in the U.S. S&P 500
index have cut estimates, Thomson Reuters data showed.
"The absence of good news in the fourth quarter reporting
season is likely to be a headwind for the market," said Daniel
McCormack, a strategist with Macquarie.
The FTSEurofirst 300 of pan-European shares was
down 0.4 percent at 1158 GMT, with the broader MSCI World index
, which tracks shares in 45 countries, also down
0.4 percent at 402.52 points.
U.S. stock index futures pointed to a flat-to-higher start
for the cash market after the worst one-day fall since November
for the U.S. S&P 500 index.
After the S&P 500's jump of almost 30 percent last year, its
forward price-to-earnings ratio is the highest in nearly seven
years. Investors are weighing the risk of paying such a high
premium for earnings that may see growth stall.
"Earnings and outlooks have to be good for us to continue to
go up," Nick Xanders, head of strategy at BTIG in London, said.
"The multiple expansion has already happened and the
earnings have to follow through but I don't think they're going
to. The U.S. retail sector is getting beaten up badly."
Analysts at Goldman Sachs said the current valuation of the
S&P 500 was "lofty by almost any measure" and the index had a 67
percent probability of a 10 percent drawdown this year.
U.S. banks are in the spotlight this week, with JPMorgan
Chase & Co, Bank of America, Citigroup and
Goldman Sachs reporting quarterly earnings.
Top analysts are predicting a 7.6 year-on-year growth in
fourth-quarter earnings for companies in the MSCI World index.
This would represent a slight miss of 0.3 percent on consensus
estimates, Thomson Reuters StarMine data showed.
After falling in the previous two days, the dollar was in
steadier form on Tuesday. It regained half a percent against the
yen after shedding more than 1 percent on Monday.
Dollar/yen was one of the strongest-performing major
currency trades last year. Many hedge funds have been betting
the trend will continue as the Federal Reserve cuts back its
bond-buying programme while the Bank of Japan remains committed
to providing stimulus.
"Given the extent of positions in the market and continued
softness in U.S. yields this week, USD/JPY could continue to
test lower near-term," analysts at BNP Paribas wrote in a note.
The greenback fell for a fourth straight session against the
euro, however, after European Central Bank official Ewald
Nowotny said on Tuesday euro zone growth may surprise on the
upside this year.
Over the past six months, the single currency, up
0.04 percent at $1.3677, has been supported by asset inflows,
fuelled by stronger data from the euro zone's struggling
periphery, particularly Spain and Italy.
Spanish bonds held steady on Tuesday as data showing the
country's economy grew at its fastest pace since 2008 in the
last quarter of 2013 supported underlying demand ahead of debt
sales this week.
"The (Spanish) growth data ... confirms the signs that we
see from other indicators as well that the economy is heading in
the right direction," said Mathias van der Jeugt, a strategist
at KBC Securities.
Among commodities, gold edged lower on Tuesday but
was still hovering around its highest level in a month due to a
drop in equities and uncertainty over the U.S. growth outlook
after a disappointing jobs report last week.
U.S. crude futures edged 0.1 percent higher to $92.09
a barrel after slipping in the previous day as Libyan supply
picked up and as a resumption of Iranian oil shipments appeared
to draw closer.