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GLOBAL MARKETS-Stock indexes turn lower on earnings outlook; oil dips

Published 08/10/2015, 03:02 am
Updated 08/10/2015, 03:09 am
© Reuters.  GLOBAL MARKETS-Stock indexes turn lower on earnings outlook; oil dips
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* Wall Street flat to lower in early trading

* Samsung helps lift Asian shares to 7-week highs

* Dollar gains vs euro, Swiss franc

* BOJ's Kuroda holds off on fresh stimulus (Updates to New York market openings)

By Caroline Valetkevitch

NEW YORK, Oct 7 (Reuters) - Wall Street and other stock indexes gave up earlier gains on Wednesday as concern grew about the outlook for U.S. earnings and oil prices reversed direction after an early surge.

U.S. stocks turned lower in late morning trading, led by declines in tech shares. Reduced profit forecasts from Adobe ADBE.O , Yum Brands YUM.N , Rexel RXL.PA and Kloeckner KCOGn.DE added to gloom about the earnings picture.

"Tech investors are very worried heading into earnings season and this has been an overhang with many of the tech stalwarts having a bullseye on their back. Worries about earnings into the back half is a major issue for the Street," said Daniel Ives, senior analyst at FBR Capital.

Oil prices initially extended recent gains as data showed the market was beginning to tighten, but prices turned lower in late U.S. morning trading.

The Dow Jones industrial average .DJI fell 14.83 points, or 0.09 percent, to 16,775.36, the S&P 500 .SPX lost 2.64 points, or 0.13 percent, to 1,977.28 and the Nasdaq Composite .IXIC dropped 16.14 points, or 0.34 percent, to 4,732.22.

The pan-European FTSEurofirst 300 .FTEU3 was down 0.1 percent, while MSCI's all-country world stock index .MIWD00000PUS was up 0.4 percent.

Asian shares reached a seven-week high. South Korea's Samsung Electronics (KS:005930) 005930.SS helped sentiment when it issued a better-than-expected profit guidance.

Crude had jumped earlier after a U.S. government report said global oil demand should increase by its fastest rate in six years in 2016.

Brent LCOc1 was down 1 percent at $51.35 after rising to a high of $52.99 a barrel. It jumped as much as $3 on Tuesday to close above $50 for the first time in a month. U.S. light crude CLc1 was down 66 cents at $47.89.

The U.S. dollar rose against the euro and Swiss franc, while the yen gained against the dollar after the Bank of Japan left monetary policy unchanged. ID:nL1N12713A

Although the Bank of Japan held off on expanding stimulus on Wednesday, expectations of more support rather than less are growing as worries mount over a global economic slowdown. This week, the International Monetary Fund again cut its growth forecast.

The potential for more stimulus from the European Central Bank and Bank of Japan has contributed to a backdrop of accommodative central bank policy, along with expectations that a Federal Reserve rate increase will remain on hold until 2016.

"Investors are a bit more confident about the global recovery and the fact that central banks aren't going to get in the way of the global recovery," said Chris Gaffney, president of EverBank World Markets in St. Louis.

Analysts have been cutting forecasts for U.S. third-quarter earnings since the start of the quarter.

While Citi strategists have warned that analyst earnings forecasts are too optimistic, they have also backed the view that the bull market has yet to die, predicting global equities will still rise 20 percent through to the end of 2016. The market is "already pricing in" a gloomier scenario, they argue.

U.S. Treasuries prices fell. Benchmark 10-year Treasuries US10YT=RR were down 9/32 in price to yield 2.067 percent, up 3 basis points from late Tuesday.

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