World stocks mixed after US earnings disappoint

World stock markets mixed, fending off doldrums despite disappointing US corporate earnings

Associated Press

BANGKOK (AP) -- World stock markets were mixed as traders unnerved by last week's disappointing U.S. corporate earnings results waited for another round Monday.

The glum results from Wall Street giants Microsoft, General Electric and McDonald's took traders by surprise and caused U.S. stocks to finish substantially lower on Friday. Investors in Asia and Europe on Monday saw little reason to go against the flow.

"The U.S. market had a significant drop," said Linus Yip, strategist at First Shanghai Securities in Hong Kong. "A significant drop in the U.S. will have an impact on Asian markets as a whole."

Britain's FTSE 100 fell 0.2 percent to 5,886.57. Germany's DAX shed 0.2 percent to 7,363.16 and France's CAC-40 slipped marginally to 3,502.31.

But Wall Street appeared set to recoup some of the ground lost Friday. Dow Jones industrial futures rose 0.2 percent to 13,280 and S&P 500 futures added 0.2 percent to 1,427.20.

Trading was subdued earlier in Asia. Japan's Nikkei 225 rose just 0.1 percent to close at 9,010.71, weighed down by a widening of its trade deficit in September.

Japan's Finance Ministry said exports plummeted 10 percent last month from a year earlier, hurt by financial and debt problems in Europe, and a surge in anti-Japanese sentiment in China.

In September, a territorial dispute with China over disputed islands in the East China Sea sparked anti-Japanese riots. In the aftermath, exports to China sank 14 percent from a year.

South Korea's Kospi lost 0.1 percent to 1,941.59 and Australia's S&P/ASX 200 dropped 0.7 percent to 4,541.

Hong Kong's Hang Seng rose 0.7 percent to 21,697.55 and mainland Chinese shares also posted gains. The Shanghai Composite Index rose 0.2 percent to 2,132.76 and the smaller Shenzhen Composite Index gained 0.5 percent to 882.03.

Yip said that "hot money," or short-term speculative inflows, being funneled into Hong Kong are helping to support its stock market. The money is coming from investors who believe that mainland China's slowdown has bottomed out and will start to pick up stream in the final quarter of the year.

Markets may stay subdued ahead of the release later in the week of U.S. data including monthly new home sales, durable goods orders and third-quarter GDP figures, some analysts said. The upcoming U.S. presidential election and developments in the Europe debt crisis also added uncertainty to the mix.

Traders also awaited a slew of corporate earnings from U.S., including Yahoo Inc. and Texas Instruments Inc.

Benchmark oil for November delivery was up 34 cents to $90.39 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell $2.05 to end at $90.05 per barrel in New York on Friday.

In currencies, the euro rose to $1.3042 from $1.3023 late Friday in New York. The dollar rose to 79.81 yen from 79.27 yen.

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