Forecast-beating US company earnings improved the mood on world equity markets on Wednesday, but US stocks opened lower as investors were disappointed with IBM’s results. Investors also remained cautious ahead of the release of minutes of Federal Reserve’s latest meeting, scheduled for later in the day.
Shares of IBM dropped 6.3 per cent after the company’s quarterly revenue fell more than expected, pointing to a bumpy recovery for the member of the Dow Jones Industrial Average.
Technology stocks led declines among the seven of 11 major S&P sectors that were lower.
IBM’s results follow strong reports from other Dow members such as Goldman Sachs, UnitedHealth and Johnson & Johnson, which helped US stocks jump more than 2 per cent on Tuesday to claw back some losses from the recent selloff.
The selloff last week was mainly driven by worries over how corporate profit would be affected by tariffs, growing wages, rising interest rates and an increasingly hawkish Fed, which President Donald Trump called “my biggest threat”.
Since the Fed’s last meeting in September, a string of strong economic data has prompted Fed policymakers to say they expect to continue a rate-hike cycle that began in late 2015
While the dollar’s mini-bounce off two-week lows checked emerging-market gains, they were supported by easing tensions between Saudi Arabia and the United States, as well as signs that Turkey’s currency crisis had been laid to rest.
A pan-European equity index rose 0.15 per cent to a one-week high. Earlier, MSCI’s ex-Japan share index added 0.6 per cent while Japan’s Nikkei jumped 1.3 per cent.