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GLOBAL MARKETS-China data, Alphabet results drag on equities; euro strengthens

Published 01/05/2019, 01:35 am
Updated 01/05/2019, 01:40 am
© Reuters.  GLOBAL MARKETS-China data, Alphabet results drag on equities; euro strengthens
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* S&P 500, Nasdaq retreat from record levels

* Surveys suggest slower Chinese factory growth this month

* Euro zone GDP grows more strongly than expected (Updates with open of U.S. markets, changes dateline; previous LONDON)

By Chuck Mikolajczak

NEW YORK, April 30 (Reuters) - Global shares fell on Tuesday, weighed by weak Chinese business surveys and a slump in shares of Google parent Alphabet (NASDAQ:GOOGL), while the euro strengthened on the heels of data that showed euro zone growth topped expectations.

Shares of Alphabet GOOG.O dropped more than 8%, the biggest drag on both the S&P 500 and Nasdaq indexes a day after both hit record levels, after the company posted its slowest revenue growth in three years. Fellow market heavyweight Apple AAPL.O is scheduled to report results after the market close on Tuesday. markets were also on shaky footing after surveys on China manufacturing missed forecasts, another sign that Beijing's efforts to spur growth in the world's second-biggest economy had yet to take hold. [ a world where everyone is kind of closing ranks, and going back towards their borders and really backing off global trade, we are still quite closely connected and we can see that today," said Jack Ablin, chief investment officer at Cresset Capital Management in Chicago.

Investors were also awaiting a policy statement from the U.S. Federal Reserve on Wednesday and payrolls data at the end of the week.

"I don't think anyone wants to stick their neck out today with Apple, the Fed and payrolls coming for the rest of the week," Ablin said.

The Fed is expected to leave interest rates unchanged as it seeks to balance solid economic growth against low inflation. Dow Jones Industrial Average .DJI fell 108.65 points, or 0.41%, to 26,445.74, the S&P 500 .SPX lost 16.21 points, or 0.55%, to 2,926.82 and the Nasdaq Composite .IXIC dropped 107.08 points, or 1.31%, to 8,054.77.

Despite the disappointing Alphabet results, corporate profits for the quarter are now showing growth of 0.7%, according to Refinitiv data, which has helped ease worries about a possible earnings recession.

Most European equities were lower after a brief move into positive territory on some encouraging data in the euro zone as economic growth in the first quarter was much stronger than expected and the unemployment rate fell to its lowest in more than a decade. pan-European STOXX 600 index .STOXX lost 0.21% and MSCI's gauge of stocks across the globe .MIWD00000PUS shed 0.36%.

The encouraging euro zone data did help the single currency of the region strengthen as it climbed above $1.12 for the first time in a week. The dollar remained subdued against a basket of major currencies even after encouraging data on housing and consumer confidence. dollar index .DXY fell 0.21%, with the euro EUR= up 0.12% to $1.1198.

Brent crude earlier topped $73 as Venezuela's opposition leader called on the military to back him to end Nicolas Maduro's rule and Saudi Arabia said a deal between producers to curb output could be extended to the end of 2019.

Prices on crude have since retreated, and U.S. crude CLcv1 fell 0.09% to $63.44 per barrel and Brent LCOcv1 was last at $71.60, up 0.08% on the day.

Benchmark 10-year notes US10YT=RR last rose 7/32 in price to yield 2.5108%, from 2.536% late on Monday.

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