On 27 October, 2015 – European markets slid on disappointing corporate earnings

Stocks were mostly lower as investors waited for monetary policy announcements from the Federal Reserve and Bank of Japan. Disappointing earnings also weighed on sentiment.
United States
Stocks slipped Tuesday on uncertainty over the US rate outlook and disappointing profits from Ford and other companies. The Dow Jones industrials slipped 0.2%, the S&P edged down 0.2% and the Nasdaq retreated 0.1%. Investors were waiting for the FOMC announcement on Wednesday afternoon after markets in Europe and the Asia Pacific are closed for the global market day.
Airlines stocks were down after Spirit and JetBlue fanned investor fears about lower fares. Spirit said revenue from the average ticket tumbled by one-fifth in the third quarter compared with a year ago and pricing was “volatile.” Its shares were down. JetBlue said its passenger carrying capacity would grow slightly faster than previously expected for 2015. Chesapeake Energy, Marathon Oil and Anadarko Petroleum declined. Pfizer raised its profit forecast after its third quarter results were better than expected. Bristol-Myers said sales of crucial new medicines like cancer drugs had improved. Ford reported improved sales of its new F-150 pickup truck, but its net income fell short of expectations. UPS shares slumped after the package delivery company surprised investors by saying its revenue dipped in the third quarter. Cummins dropped after the truck-engine maker posted disappointing third quarter results and cut its outlook for the year. Cummins said it would eliminate up to 2,000 jobs because of a slowdown in the global markets. Alibaba said it received a big lift from mobile sales in the third quarter. Shares of Yahoo, which owns a big stake in Alibaba, gained. IBM was down to a five-year low after the company disclosed today that regulators are investigating its accounting treatment of certain transactions in the US, UK and Ireland.
Twitter reported a 57.6% rise in quarterly revenue. Revenue rose to US$569.2 million from US$361.3 million a year earlier. Net loss narrowed to US$131.7 million, or 20 US cents per share in the third quarter ended September 30 from US$175.5 million or 29 US cents per share a year earlier.
Apple’s quarterly revenue rose 22.3 percent as sales of iPhones jumped 36 percent, driven by the launch of the 6S and 6S Plus models in September. The company’s net income rose to US$11.12 billion or US$1.96 per share in the fourth quarter ended September 26 from US$8.47 billion or US$1.42 per share a year earlier. Net sales rose to US $51.50 billion from US$42.12 billion. The company said that it sold about 48 million iPhones in the quarter.
Gold at the afternoon London fixing was down 70 US cents to US$1,165.70. Copper futures were up 0.3% to US$2.36. WTI spot crude was down 76 US cents to US$43.22. Dated Brent spot crude was down 71 US cents to US$46.83. The US dollar was up against the euro, pound, Swiss franc and the Canadian and Australian dollars. However, it declined against the yen. The Dollar Index was up 0.2%. The yield on US Treasury 30 year bond was down 2 basis points to 2.85% while the yield on the 10 year note also slipped 2 basis points to 2.03%.
Europe
Stocks declined Tuesday as disappointing corporate financial results from companies like BASF and Novartis dampened investors’ spirits. Energy and resource stocks were also under pressure due to weakness in commodity prices. The FTSE lost 0.8%, the SMI retreated 0.7% and the CAC and DAX were 1.0% lower. Investors remained cautious ahead of Wednesday’s Federal Reserve policy announcement.
BASF tumbled after the chemicals group cut its full year earnings guidance, citing weak sales in China and other emerging markets. Wirecard was down after it agreed to acquire the payments business of Great Indian Retail Group. Both RWE and E.ON were lower. In Paris, Air Liquide advanced after it reiterated its profit guidance after reporting a 7.8% increase in quarterly revenue. Technip and Total declined. In London, BP was down after the oil giant laid out plans to cut costs and spending on projects. Shire increased after its Phase 3 trial of lifitegrast, its treatment for dry eye, met the primary endpoint of significantly improving patient reported symptoms. Novartis was down after it reported third quarter net income that missed estimates. In the UK, BHP Billiton, Anglo American, Rio Tinto, Antofagasta and Glencore retreated as did Royal Dutch Shell.
Eurozone September M3 money supply growth was up 4.9% on the year for a second month. UK third quarter gross domestic product was up a quarterly 0.5%, down from second quarter’s 0.7%. On the year, GDP was up 2.3%.
Asia Pacific
Stocks were mostly lower — investors were cautious ahead of the FOMC and the Bank of Japan announcements later in the week. Weakness in commodity prices also weighed.
The Shanghai Composite edged up 0.1% after falling more than 2% in early trading on reports of rising tensions between the US and China over territorial claims in the disputed South China Sea. The Hang Seng also added 0.1%.
The Nikkei retreated 0.9% as nervous investors stayed on the sidelines ahead of the FOMC and BoJ meetings. Honda Motor, Panasonic, Canon and Sony were down as the yen rose against the US dollar. Energy explorer Inpex and JX Holdings were down as crude prices extended a two week slide. Apple suppliers TDK and Murata Manufacturing declined after Apple shares fell more than 3% in New York overnight. Advantest was down after cutting its full year profit forecast for the year ending next March. Toshiba declined on a Nikkei report that the company may shift 1,100 workers at a production base in Japan to Sony along with the sale of its image sensor operations to that company.
Both the S&P/ASX and All Ordinaries were virtually unchanged with a negative bias. Santos and rival Woodside Petroleum declined. Beach Energy dropped after reporting a 15% slide in quarterly revenue. BHP Billiton and Rio Tinto retreated. Fortescue Metals Group sank after it entered into a deal with BC Iron to tie the rail and port tariff for their Nullagine joint venture. Explosives maker Orica advanced after appointing former chief executive and current Asciano chairman Malcolm Broomhead as its chairman. NAB shares were placed in a trading halt pending an announcement in relation to selling stake in its underperforming life insurance business. Banks were mixed.
The Kospi was down 0.2% on institutional selling. The Sensex declined 0.4% as a four-week global rally ran out of steam ahead of central bank meetings in the U.S. and Japan. Mixed earnings results also dampened investor sentiment ahead of the expiry of near-month derivative contracts on Thursday.
Global Stock Market Recap

Please remember, the value of investments and the income from them can do down as well as up. Funds that invest in overseas markets may be subject to currency fluctuations. Investments in small and emerging markets can be more volatile than other overseas markets. Reference in this document to specific securities should not be construed as a recommendation to buy or sell these securities, but is included for the purposes of illustration only.
Looking forward*
Australia releases third quarter consumer price index. Japan posts September retail sales. In the US, September international trade in goods will be released. The FOMC announces its monetary policy decision.
*Note — all releases are listed in local time.