Euro banking deal fails to impress markets
LONDON (AP) — A sketchy agreement on how to create a single European banking supervisor combined with a run of disappointing U.S. corporate earnings to hit markets Friday at the end of what’s been a fairly upbeat week.
The bout of pessimism began Thursday when Google surprised investors by publishing by mistake its worse-than-expected earnings ahead of schedule.
Microsoft also disappointed with its latest update, contributing to a broad retreat in technology stocks, as did McDonald’s and General Electric.
‘‘After what had started to look like a relatively upbeat season, investors are now looking a little more wary,’’ said Fawad Razaqzada, market strategist at GFT Markets.
By the time markets closed in Europe, Germany’s DAX was down 0.8 percent at 7,380 while the CAC-40 in France fell 0.9 percent to 3,504. The FTSE 100 index of leading British shares was 0.3 percent lower at 5,896.
U.S. stocks were down, too, with the Dow Jones industrial average 1.3 percent lower at 13,320 and the broader S&P 500 index 1.4 percent lower at 1,437.
An agreement early Friday by the leaders of the 17 euro countries to push ahead with a single banking supervisory body failed to support markets. The leaders remained vague on key details, such as when the supervisor will be up and running.
Some investors and analysts worry that Europe’s politicians may have lost the incentive to fix things quickly now that market turmoil has subsided. The borrowing costs of countries like Spain have eased since the European Central Bank unveiled in September a new bond-buying program.
‘‘It seems investors are becoming frustrated with the continuous proposals outlined by EU policy makers to resolve the debt crisis but failing to provide investors with specific information regarding how the fund will operate, the time scale involved and perhaps more crucially, how much funds will be needed,’’ said Shavaz Dhalla, a financial trader at Spreadex.
The unconvincing result of the EU summit left the euro trading 0.3 percent lower on the day at $1.3029.
Earlier, Asian stock markets plodded through a mostly mixed session.
Japan’s Nikkei 225 index rose 0.2 percent to finish at 9,002.68. South Korea’s Kospi lost 0.8 percent to 1,943.84. Hong Kong’s Hang Seng added 0.2 percent to 21,551.76.
In mainland China, the Shanghai Composite Index fell 0.2 percent to 2,128.30 and the smaller Shenzhen Composite Index shed 0.2 percent to 877.29. Markets in Singapore, Taiwan, Thailand, Indonesia and India also fell.
Oil markets edged lower after a brief spike on news that a key pipeline transporting crude from Canada to the U.S. Midwest was shut down for repairs. The price of benchmark New York crude was down $1.17 in midafternoon trading at $90.93 a barrel.