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GLOBAL MARKETS-Weak results drag on tech stocks; dollar drops before Fed

Published 28/04/2016, 01:39 am
© Reuters.  GLOBAL MARKETS-Weak results drag on tech stocks; dollar drops before Fed
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* Apple (NASDAQ:AAPL), Twitter weigh on global tech stocks

* Dollar weak before Fed rate decision; no change seen

* Oil up at highs on weak dollar; EIA survey trims gains (New throughout, changes dateline, previous LONDON)

By Dion Rabouin

NEW YORK, April 27 (Reuters) - Disappointing results from Apple and Twitter hurt world technology stocks on Wednesday, while the U.S. dollar weakened ahead of a policy announcement by the Federal Reserve, pushing oil prices to 2016 highs.

Apple APPL.O shares slumped 7 percent in early trading after the company reported its first drop in iPhone sales and its first decline in revenue in more than a decade on Tuesday. Twitter TWTR.N tumbled more than 15 percent after first-quarter revenue lagged expectations. Nasdaq's information technology sector fell 1.75 percent, with Facebook FB.O and Alphabet GOOGL.O also lower.

Wall Street was lower in early trading ahead of the Fed decision.

The Dow Jones industrial average .DJI fell 62.18 points, or 0.35 percent, to 17,928.14, the S&P 500 .SPX lost 7.98 points, or 0.38 percent, to 2,083.72 and the Nasdaq Composite .IXIC dropped 53.88 points, or 1.1 percent, to 4,834.41.

European shares eked small gains, with advances at sportswear group Adidas ADSGn.DE and British bank Barclays BARC.L helping shake off a retreat in tech stocks.

The pan-European FTSEurofirst 300 index .FTEU3 rose 0.1 percent, while the euro zone's blue-chip Euro STOXX 50 index .STOXX50E advanced 0.2 percent.

A gauge of global equity markets .MIWD00000PUS fell 0.35 percent, with Japan's Nikkei index .N225 and Chinese markets .SSEC .CSI300 down around 0.4 percent.

RATE DECISION

The dollar fell 0.2 percent against a basket of currencies .DXY as investors waited for a Federal Reserve decision on U.S. interest rates at 2 p.m. EST (1800 GMT).

The Fed is expected to leave rates unchanged as it continues to monitor the impact from weakening global growth, but some analysts said the central bank could alter its language to highlight reduced global risks. markets are setting up for a pretty dovish statement after this Fed meeting," said Chris Gaffney, president of EverBank World Markets in St. Louis. He said the risk of a hawkish tweak to the Fed's language was limiting the greenback's losses in the morning session.

Economists polled by Reuters expect two rate increases this year, although futures prices show traders do not expect rates to rise until late in the year, according to CME Group's FedWatch. Higher U.S. rates generally boost the dollar by driving investment flows into the United States.

The Australian dollar AUD= was the biggest mover among currencies, falling more than 2 percent to $0.7581 after data showed that core inflation unexpectedly slowed to its lowest on record in the first quarter.

The Aussie is on track for its biggest one-day fall in three months, reviving talk the Reserve Bank of Australia could cut the record-low 2 percent cash rate at its May policy meeting next week.

"The inflation data clearly puts an interest rate cut back on the table quite firmly," said Rabobank currency strategist Jane Foley in London.

The dollar resumed its fall against the yen JPY= and euro EUR= , dipping 0.15 percent against the Japanese currency and 0.25 percent against the euro.

The weaker dollar helped lift crude futures to 2016 highs in early trading, but oil gave back most of its gains after the Energy Information Administration reported U.S. crude stocks rose last week to a fresh record high.

Brent crude LCOc1 , the international benchmark, was last up 15 cents to $45.83 a barrel. U.S. crude fell 9 cents to $44.10 a barrel. O/R

Benchmark U.S. 10-year government notes US10YT=RR were up 10/32 in price with a yield of 1.893 percent, as Treasury prices clung to earlier gains.

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