* US stocks down ahead of earnings, profits seen limp
* Euro zone data points to stabilization of weak economy
* Dollar falls vs yen after sharp, rapid rise
* Oil edges higher; copper ticks lower
By Ryan Vlastelica
NEW YORK, Jan 8 Global shares fell on Tuesday,
with U.S. investors cautious ahead of an earnings season
expected to show sluggish growth in corporate profits.
European shares were flat as data showed the euro zone
economy may be stabilizing, though at a weak level. The euro
held steady while commodity markets were largely subdued as
investors sat on recent gains.
Profits in the U.S. fourth quarter are seen above the
previous quarter's lackluster results, but analyst estimates are
down sharply from where they were in October. Quarterly earnings
are expected to grow by 2.8 percent, according to Thomson
Alcoa Inc reports results after the market closes on
Tuesday, and as the first Dow component to report, the aluminum
company's results are seen as setting the tone for the season.
If earnings growth appears to be "less bad" than expected,
that would fuel a near-term uptick in the market, according to
Eric Wiegand, senior portfolio manager at U.S. Bank Wealth
Management in New York. "There's still ample areas for concern,"
he added, citing policy worries in Washington and uneven
In Europe, the data was mixed. Euro zone business confidence
improved again in December, but unemployment reached a record
and households held back from spending in the run-up to
Christmas, suggesting a recovery from recession will be slow.
German industrial orders also fell more than forecast due to a
sharp drop in demand from abroad.
"Things are bad. It is still consistent with recession, but
at least they have stopped deteriorating," said Deutsche Bank
economist Gilles Moec.
European shares edged down 0.08 percent. The euro
held steady at just over $1.3120. Global shares measured
by MSCI's ACWI price index fell 0.5 percent.
The Dow Jones industrial average was down 66.04
points, or 0.49 percent, at 13,318.25. The Standard & Poor's 500
Index was down 8.86 points, or 0.61 percent, at 1,453.03.
The Nasdaq Composite Index was down 16.10 points, or
0.52 percent, at 3,082.71.
In the currency market, the dollar paused a sharp rally
against the yen that has boosted it almost 12 percent in
less than two months. The rise has come as expectations grow
that Japan's new government will push the central bank to ease
policy aggressively in the next few months.
The dollar was last down 0.4 percent at 87.40 yen, some way
off the 2-1/2-year high of 88.48 hit last Friday.
"We will perhaps see a marginal retracement (in dollar/yen)
over the next couple days and I'd be slightly more bearish
dollar over the next few days ... on profit-taking," said Geoff
Kendrick, FX strategist at Nomura.
STEADY BOND MARKETS
Bond markets smoothly digested the first debt sales of the
year by the Netherlands and Austria, as well as Spain's
announcement that it plans to borrow 121.3 billion euros this
year, 7.6 percent more than in 2012.
Madrid is expected to turn to official lenders for a bailout
in 2013, although a European Central Bank promise to preserve
the euro has significantly reduced the pressure.
German government bond prices also edged higher as investors
dipped a toe back into the market for low-yielding but secure
assets as a steep selloff last week made valuations more
The German bund future was up 42 ticks at 143.48,
climbing for a second day after a small rise on Monday and
moving in line with U.S. Treasuries. The rebound follows a
three-point sell-off last week when an easing of U.S. fiscal
concerns caused investors to pile into riskier assets.
The benchmark 10-year U.S. Treasury note was up
8/32, the yield at 1.8709 percent.
In commodity and metals markets, Brent crude oil
rose 0.2 percent, steadying above $111 a barrel, while U.S.
light crude was down 0.4 percent at $92.82. Copper was
down 0.2 percent and gold edged back above $1,655 an
ounce before data on Thursday from China and the ECB's monthly
"The market is underpinned by expectations that a cyclical
rebounding out of China will be positive for industrial metals,
and there is more positive sentiment now in the market," said
Robin Bhar, analyst at Societe Generale.