World Stocks Fall On Mixed Earnings

World stock markets fell Wednesday amid mixed corporate earnings and on views that the U.S. Federal Reserve’s expected stimulus measures will be more modest and gradual than expected.

In morning European trading, Germany’s DAX was down 0.2 percent at 6,600.9749 and France’s CAC-40 slid 0.4 percent to 3,8498.57. Britain’s FTSE 100 was off 0.5 per cent at 5,678.96.

Deutsche Bank AG reported a euro1.2 billion ($1.7 billion) loss for the third quarter, due to a big charge related to its planned takeover of retail lender Postbank AG. Its underlying earnings were not as bad as some investors expected, however, and its shares edged up 0.2 percent.

Swedish appliance maker Electrolux AB said third-quarter net profit fell 15 percent, while Spain’s BBVA bank posted a 17 per cent drop. Their shares were down 1 per cent and 1.5 percent, respectively.

Finnish paper maker Stora Enso Oyj reported a profit, after a loss a year earlier, and its stock rose over 2 percent.

Beyond corporate news, markets were focused on the prospects for monetary stimulus by the Fed.

Traders have bet that the U.S central bank will enact a bond-buying programme in early November in a bid to support the world’s biggest economy. Buying bonds would drive interest rates and yields even lower, which makes stocks a more attractive investment.

The Wall Street Journal reported Wednesday, without citing sources, that the Fed will likely take a more gradual and flexible approach to economic stimulus by announcing a new programme to buy several hundred million dollars worth of US Treasury bonds over the net few months. That’s in contrast to the nearly $2 trillion spent during the financial crisis.

It also suggests traders’ hopes that the size of the bond purchase will be around $500 billion may be excessive. Those expectations were dampened somewhat by a speech earlier this week by William Dudley, the president of the Federal Reserve Bank of New York.

Dudley said further Fed action was “likely to be warranted” unless the economic outlook improved. Still, he added that the Fed “cannot wave a magic wand and make the problems remaining from the preceding period of excess vanish immediately.”

The Federal Reserve is due to decide on the new economic stimulus measures next week.

Futures augured losses on Wall Street. Dow futures lost 48 points, or 0.4 percent, to 11,076.00 and broader S&P futures shed 5.3, or 0.4 percent, to 1,177.50.

Eyes will be on more corporate earnings in the U.S., including from Procter & Gamble, Whirlpool and Visa.

In Asia, Japan’s benchmark Nikkei 225 stock index trimmed gains to close up just 9.65 points, or 0.1 percent, at 9,387.03. Exporters got a modest lift as the yen reversed some of its recent strength against the U.S. dollar.

Investors were reluctant to trade heavily ahead of the release of corporate results from major Japanese companies including Sony Corp. and Honda Motor Co. later this week.

South Korea’s Kospi fell 0.5 percent to 1,909.54 after government figures showed the country’s economic growth slowed sharply in the third quarter on weaker exports and manufacturing. Asia’s fourth-largest economy expanded 0.7 percent in the July-September period after 1.4 percent growth in the previous quarter.

Hong Kong’s Hang Seng index tumbled 1.9 percent to 23,164.58 and mainland China’s benchmark dropped 1.5 percent to 2,997.05.

Australia’s S&P/ASX 200 shed 0.9 per cent to 4,648.10. Benchmarks in India, Singapore and Taiwan also fell.

On Wall Street, the Dow Jones industrial average closed up 5.41 points, or 0.1 percent, at 11,169.46. The Standard & Poor’s 500 index rose 0.02 to 1,185.64 while the technology-focused Nasdaq composite index rose 6.44, or 0.3 percent, to 2,497.29.

In currencies, the dollar rose to 81.69 yen from 81.49 yen late Tuesday in New York. The euro fell to $1.3837 from $1.3850.

Benchmark crude for November delivery slid 83 cents to $82.83 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose 3 cents to settle at $82.55 on Tuesday.