World News | Asian Shares Fall After Weak Earnings Pull Wall St Lower

Bangkok, Oct 20 (AP) Asian shares were mostly lower on Thursday after Wall Street benchmarks fell, reversing course after two days of gains.

Wall Street futures were lower while oil prices were mixed.

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The pullback on Wednesday came as investors reviewed quarterly earnings reports and Treasury yields climbed to multiyear highs, tempting traders with higher returns on relatively low-risk investments.

Asia tracked those losses.

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Tokyo's Nikkei fell 1.1 per cent to 26,954.15 while the Kospi in Seoul declined 1.3 per cent to 2,208.48. In Hong Kong, the Hang Seng shed 1.9 per cent to 16,194.09.

The Shanghai Composite index edged 0.1 per cent lower to 3,042.98 and Australia's S&P/ASX 200 gave up 1.1 per cent to 6,724.70.

Early gains Wednesday on Wall Street faded fast. The S&P 500 fell 0.7 per cent to close at 3,695.16, while the Dow Jones Industrial Average slipped 0.3 per cent to 30,423.81. The Nasdaq composite ended 0.9 per cent lower, at 10,680.51.

Small companies fell more than the rest of the market, sending the Russell 2000 index 1.7 per cent lower to 1,725.76.

Stocks were coming off of two days of gains, but trading has been unsteady throughout.

Netflix soared 13 per cent and United Airlines rose 5 per cent after releasing their quarterly results, while others, including Abbott Laboratories and M&T Bank, sank.

The yield on the 10-year Treasury, which influences mortgage rates, climbed to 4.13 per cent, its highest level since June 2008. It was at 4.02 per cent late Tuesday. The yield on the two-year Treasury, which tends to track expectations for future Federal Reserve action, rose to 4.54 per cent from 4.43 per cent.

A sharp move in the three-month Treasury may have helped put traders in a selling mood. The yield briefly hit 4.01 per cent before inching back to 3.98 per cent. Should the three-month Treasury yield rise above that of the 10-year Treasury, what's known as an inversion, that would be a strong warning that the economy could be headed for a recession.

The Federal Reserve has been raising interest rates to temper high prices. Those increases are meant to make borrowing more difficult and slow economic growth in an effort to tame inflation, but the strategy risks stalling the already slowing US economy.

Homebuilders and other housing industry-related companies fell Wednesday following a report showing that construction on new homes declined more than expected in September. Homebuilder Lennar fell 6 per cent and home-improvement retailer Lowe's slid 4.8 per cent.

US crude oil prices rose 3.3 per cent, giving a boost to energy stocks. Exxon Mobil rose 3 per cent. The White House plans to announce another release of oil from the US strategic reserve.

Early Thursday, US benchmark crude was up 53 cents at USD 86.08 per barrel in electronic trading on the New York Mercantile Exchange.

Brent crude, the international pricing standard, shed 12 cents to USD 92.29 per barrel.

Investors have been focusing on the latest round of corporate earnings this week, watching for clues about how companies are dealing with the hottest inflation in four decades and how they intend to operate through the rest of the year and into 2023.

Household goods giant Procter & Gamble rose 0.9 per cent after also reporting strong financial results.

It joined a growing list of companies, including Hasbro and Johnson & Johnson, warning investors about a strong US dollar cutting into revenue. A strong dollar decreases the value of overseas sales after converting the currency. The US currency is now worth more than a euro for the first time in 20 years.

The dollar has gained strength versus currencies worldwide as inflation and recession concerns prompt investors to look for relatively stable investments. Central governments and banks worldwide are dealing with stubbornly hot inflation. British food prices rose at the fastest pace since 1980 last month, driving inflation back to a 40-year high.

Early Thursday, the dollar was at 149.93 Japanese yen, up from 149.81 yen. The euro slipped to 97.59 cents from 97.73 cents. (AP)

(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)