Google earnings help buoy global markets
LONDON (AP) — A strong round of U.S. corporate earnings, most notably from Google parent Alphabet, helped buoy global stock markets on Tuesday despite some soft economic data that stoked some concerns about the state of the global economy at a time when trade tensions are elevated.
KEEPING SCORE: In Europe, Germany’s DAX rebounded 1.6 percent to 12,750 while the CAC 40 in France was 1 percent higher at 5,432. The FTSE 100 index of leading British shares gained 0.9 percent to 7,726. U.S. stocks were poised for a higher opening with Dow futures and the broader S&P 500 futures up 0.5 percent.
U.S. CORPORATE EARNINGS: On Monday, Google parent Alphabet reported a profit of $3.2 billion for the three months that ended June 30. It booked a $5.1 billion charge to cover a fine levied by European regulators, who have accused Google of unfairly forcing handset makers to take its Chrome, Search and Play Store apps when using its free Android mobile system. Google has said it will appeal the European fine. Alphabet Inc.’s stock jumped 3.6 percent in after-market trading. Boeing, Facebook, Amazon.com and McDonald’s are also due to report results later this week.
ANALYST TAKE: “After a quiet start the equity bulls have come charging into the fray, emboldened by Google’s figures,” said Chris Beauchamp, Chief Market Analyst at IG. “Over the past week markets around the globe have struggled to make much headway, but today this trench warfare appears to be resolving in favor of buyers.”
GROWTH SLOWDOWN: A closely watched survey is showing that economic growth across the 19-country eurozone moderated at the start of the third quarter. Financial information firm IHS Markit said Tuesday that its purchasing managers index — a broad gauge of business activity — for the eurozone eased to 54.3 in July from 54.9 in June. Though still above the 50 mark that means the economy continues to grow, the firm said weakened new order inflows and reduced business expectations of future activity fostered a downbeat picture. Meanwhile, another suggested that Japanese manufacturing is slowing. The flash Markit/Nikkei purchasing managers’ index fell to 51.6 in July from a final 53.0 in June, a 20-month low. The downbeat numbers could alleviate pressure on Japan’s central bank to roll back its massive monetary stimulus policy.
ASIA’S DAY: Japan’s Nikkei 225 gained 0.5 percent to 22,510.48. South Korea’s Kospi added 0.5 percent to 2,280.20. Hong Kong’s Hang Seng jumped 1.4 percent to 28,662.57. The Shanghai Composite Index climbed 1.6 percent to 2,905.56. Australia’s S&P-ASX 200 rose 0.6 percent to 6,265.80.
CURRENCIES: The euro was flat at $1.17 while the dollar fell 0.2 percent to 111.15 yen.
OIL: Benchmark U.S. crude added 35 cents to $68.24 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used to price international oils, gained 16 cents to $73.22.