* European shares, U.S. futures dip
* Earnings depress Google, IBM in after-hours trade
* Remy profit warning hurts European stocks
* Dovish Yellen dents dollar, sterling at 5-1/2 yr high
By Carolyn Cohn
LONDON, April 17 European shares fell and U.S.
futures pointed to a weaker open on Wall Street on Thursday
after disappointing results from tech heavyweights Google and
IBM, while the dollar fell on dovish U.S. Federal Reserve
Futures prices suggested U.S. stocks will open 0.2
percent lower. Google released earnings data
after U.S. markets shut on Wednesday, showing that first-quarter
revenue fell short of Wall Street targets and that margins
IBM Corp reported after hours on Wednesday its
lowest quarterly revenue for five years as it struggles with
falling demand for storage and server products.
U.S. stocks had ended Wednesday with gains of 1 percent.
European stocks fell 0.25 percent ahead of the
Easter holiday weekend. They were hit by a profit warning from
French spirits maker Remy Cointreau and a fall in
sales at UK spirits company Diageo as the Chinese
government cracks down on ostentatious spending. Concern over
the tense situation in Ukraine also weighed on the market.
In addition, export-driven European companies have been hurt
by the strength of the euro, which makes their products more
expensive in other currencies.
"I don't think first quarter earnings will be great, as
you've still got a relatively high euro, which will cause a drag
on year-on-year figures," said Nick Nelson, European equity
strategist at UBS.
The dollar and U.S. Treasury yields fell after Fed Chair
Janet Yellen on Wednesday said it might take two years to return
to full employment and there was more risk of inflation staying
too low than going too high.
Achieving the Fed's economic goals "will likely require low
real interest rates for some time", a policy view she said was
shared broadly across many advanced economies.
"Yellen's comments have hurt the dollar as she has indicated
that the Fed is in no hurry to raise rates," Societe Generale
currency strategist Alvin Tan said.
"With U.S. yields at the bottom of its recent range, we
expect the dollar to remain soft. Only when yields pick up and
the market focuses on rate hikes by the Fed will the dollar
start to rally. That we expect some time in the third quarter of
Yields on Treasury 30-year bonds dipped to their lowest
since June at 3.44 percent. German Bund futures
rose 2 ticks to 144.38.
The dollar eased 0.14 percent to 102.08 yen. The euro
was 0.27 percent firmer at $1.3851.
Sterling hit a 5-1/2 year high against a basket of
currencies as recent data strengthened investor confidence in
Britain's economic outlook.
Bonds in peripheral Europe extended their spectacular rally
amid speculation that persistently low inflation would force the
European Central Bank to launch further stimulus.
Yields on Spanish 10-year debt sank to their
lowest in over eight years at 3.044 percent, while Italian
10-year yields hit an all-time trough around 3.1
The yield on the first bond Greece sold after its 2012
default dipped just below its issuance levels, as Athens
rejoined the ECB-inspired peripheral debt rally following a
brief period of selling pressure.
The situation in Ukraine remained tense, with the interior
minister saying on Thursday that three pro-Russian separatists
had been killed in shooting overnight in the town of Mariupol on
the Sea of Azov.
Ukrainian, Russian and Western diplomats arrived for
emergency talks in Switzerland, but there was little hope of
them making progress in resolving a crisis that has seen armed
pro-Russian fighters seize whole swathes of eastern Ukraine.
Spot gold steadied at $1,298.50 an ounce, having
found support around $1,290/1,293 after a technical selloff this
Brent crude for June dipped 11 cents to $109.49 a
barrel though U.S. crude rose 24 cents to $104, with the
Ukraine tensions heightening concerns over Russian supplies.
(Additional reporting by Wayne Cole in Sydney and Anirban Nag
and Alistair Smout in London)