Markets on defense ahead of US corporate earnings
AP and AFP
October 24, 2012, 12:17 am TWN
LONDON/HONG KONG--Financial markets were on the defensive Tuesday ahead of another round of U.S. corporate earnings, including from Facebook, and amid uncertainty over the outcome of the U.S. presidential election.
The U.S. has been center stage this week as the earnings season continues and as the election looms. So far earnings have been mixed, particularly from the technology sector.
“We are currently in the third week of a disappointing corporate earnings season,” said Craig Erlam, market analyst at Alpari.
Facebook's earnings results after the market close will be key for its future. The social network has had a dire time since its stock flotation earlier this year, losing over a third of its value, as investors have grown concerned about the company's ability to raise money from advertising.
“The results have the potential to make or break Facebook as an investment,” said Erlam.
Over-arching the focus on earnings is the battle for the White House, with opinion polls showing the two candidates are in a dead heat. Last night's debate between President Barack Obama and Mitt Romney appears to have done little to change that.
Meanwhile, the Federal Reserve starts its regular two-day policy meeting Tuesday but little is expected in the midst of the election.
By late morning in Europe, Germany's DAX was down 0.9 percent at 7,265 while the CAC-40 in France fell 0.6 percent to 3,464. The FTSE 100 index of leading British shares was down 0.8 percent at 5,837.
Wall Street was poised for a lower opening, with Dow futures down 0.5 percent and the broader S&P 500 futures 0.7 percent lower.