Gloomy data tempers optimism on global economy
By Lawrence Delevingne and Tom Wilson
(Reuters) — Global stocks were mostly down and oil slipped on Tuesday as declining factory activity in the euro zone and China tempered investors' optimism over global economic prospects and a likely end to U.S. rate hikes.
On Wall Street, The Dow Jones Industrial Average rose 0.12%, to 35,603.7, the S&P 500 lost 0.29%, to 4,575.84 and the Nasdaq Composite dropped 0.6%, to 14,260.44.
Merck & Co. rose 2.5% as it raised its full-year profit forecast; Pfizer (NYSE:PFE) slipped 0.3% as it missed estimates for quarterly revenue; and Caterpillar Inc (NYSE:CAT) gained around 4% despite warning of a fall in third-quarter sales and margins.
European stocks fell 0.7%, deepening losses through the morning and stepping back from a 2% increase in July, its second month of gains.
UK stocks turned negative, losing 0.3%, though HSBC climbed as much as 3% after announcing a $2 billion share buyback and raising its key profitability target.
Losses accelerated across European markets after data showed manufacturing activity in the bloc contracted in July at the fastest pace since May 2020 amid slumping demand even as factories cut their prices sharply.
The data collided with optimism among investors who are readying for an end to a series of U.S. Federal Reserve interest rate hikes, with an increase last week widely seen as one of the last in its current tightening cycle.
The yield on 10-year Treasury notes was up 5.6 basis points to 4.013%. The two-year yield, which typically moves in step with interest rate expectations, was up 1.9 basis points at 4.893%.
Market players put Tuesday's losses down to a combination of profit taking at the start of the month, as well as nerves over the durability of
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