January 8, 2013 / 8:21 PM / 5 years ago

GLOBAL MARKETS-Shares down ahead of earnings, bonds rise

* US stocks down ahead of earnings, profits seen limp
    * Dollar falls vs yen after sharp, rapid rise
    * Euro zone data points to stabilization of weak economy
    * Brent oil edges higher; gold also rises

    By Ryan Vlastelica and Herbert Lash
    NEW YORK, Jan 8 (Reuters) - Global shares fell and bond
prices rose on Tuesday, with  investors cautious ahead of a U.S.
earnings season expected to show sluggish growth in quarterly
corporate profits.
    The dollar and euro plunged against the yen as investors
booked profits in the aftermath of swift and significant gains,
but looser Bank of Japan monetary policy should limit the yen's
    The dollar was last down 0.67 percent at 87.18 yen,
well off a 2-1/2-year high hit last Friday.
    Corporate profits are expected to be higher than the third
quarter's lackluster results, but analysts' estimates are down
sharply from where they were in October. 
    Quarterly earnings are expected to grow by 2.8 percent,
according to Thomson Reuters data. 
    Alcoa Inc reports results after the market close on
Tuesday, marking the unofficial start to the earnings season as
the first Dow component to release its results.
    Early reports have suggested some signs of improvement.
Monsanto Co reported strong first-quarter results and
raised its full-year outlook, sending its shares up 2.56 percent
to $98.40. 
    Sears Holding Corp reported sales for the holiday
season that were not as weak as many had feared, but the stock
sank as the company's chief executive stepped down unexpectedly.
Shares fell 5.6 percent to $40.53. 
    If earnings growth appears to be "less bad" than expected,
that would fuel a near-term uptick in the market, according to
Eric Wiegand, senior portfolio manager at U.S. Bank Wealth
Management in New York. "There are still ample areas for
concern," he added, citing policy worries in Washington and
uneven economic growth.
    The Dow Jones industrial average was down 73.04
points, or 0.55 percent, at 13,311.25. The Standard & Poor's 500
Index was down 7.25 points, or 0.50 percent, at 1,454.64.
The Nasdaq Composite Index was down 13.05 points, or
0.42 percent, at 3,085.76. 
    Global shares measured by MSCI's ACWI price index
 fell 0.4 percent.
     The FTSEurofirst 300 index of top European shares
closed down 0.1 percent at 1,160.20 points as data showed the
euro zone economy may be stabilizing, though at a weak level.
    The euro slid 0.24 to 1.3082 the dollar.
    Euro zone business confidence improved again in December,
but unemployment reached a record and households held back from
spending in the run-up to Christmas, suggesting a recovery from
recession will be slow. German industrial orders also fell more
than forecast due to a sharp drop in demand from abroad.
    "Things are bad. It is still consistent with recession, but
at least they have stopped deteriorating," said Deutsche Bank
economist Gilles Moec.
    Prices for U.S. Treasuries rose as higher yields proved
attractive and the first sale of coupon-bearing Treasury debt
for the year saw strong non-dealer bidding.
    The Treasury sold $32 billion of three-year notes 
on Tuesday at a high yield of 0.385 percent, just about where
the market had expected. 
    The high direct takedown in this and the previous three-year
auction could signal "a shift in investor bidding patterns at
auctions, where buyers bypass dealers and go straight to the
Treasury, while still able to clear the auction near the WI
(when issued) levels," wrote Nomura analysts after the sale.
    The benchmark 10-year U.S. Treasury note was up
8/32 in price to yield 1.8709 percent.
    In commodity and metals markets, Brent crude oil 
rose 59 cents to $111.99 per barrel, while U.S. light crude
settled down 4 cents at $93.15. 
    Copper rose 0.1 percent and gold rose $13.26
to $1,659.90 before data on Thursday from China and the ECB's
monthly meeting.
    "The market is underpinned by expectations that a cyclical
rebounding out of China will be positive for industrial metals,
and there is more positive sentiment now in the market," said
Robin Bhar, analyst at Societe Generale.
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