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GLOBAL MARKETS-Stocks slide on earnings misgivings; oil off after big U.S. inventory build

Published 2018-10-17, 11:16 a/m
Updated 2018-10-17, 11:20 a/m
© Reuters.  GLOBAL MARKETS-Stocks slide on earnings misgivings; oil off after big  U.S. inventory build

© Reuters. GLOBAL MARKETS-Stocks slide on earnings misgivings; oil off after big U.S. inventory build

* European auto sector, IBM (NYSE:IBM) weigh on global equities

* Dollar index up ahead of Fed minutes

* Crude oil futures fall for first session in four (New throughout, updates prices, market activity and comments to U.S. trading; new byline, changes dateline, previous LONDON)

By Rodrigo Campos

NEW YORK, Oct 17 (Reuters) - A gauge of stocks across the world edged lower on Wednesday following its largest daily run-up in over two years, as the outlook on earnings soured after a warning on the European auto sector and a revenue miss from IBM.

Crude futures fell for the first session in four after U.S. government data showed a much larger-than-expected build in crude inventories. U.S. dollar rose as the market awaited the minutes from the latest Federal Reserve meeting. Lower-than-expected UK inflation data weighed on sterling, which gave up the previous day's gains. Wall Street, IBM IBM.N fell 7.4 percent, dragging blue-chips lower a day after the company missed revenue expectations. On Tuesday, the S&P 500 posted the biggest daily gain since late March. extended losses when oil prices fell further.

"The (stock) indices are pulling back after yesterday's blockbuster earnings rally that is likely to be challenged by the Fed's FOMC minutes," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

The Dow Jones Industrial Average .DJI fell 266.91 points, or 1.03 percent, to 25,531.51, the S&P 500 .SPX lost 25.22 points, or 0.90 percent, to 2,784.7 and the Nasdaq Composite .IXIC dropped 76.18 points, or 1 percent, to 7,569.31.

European stocks hit a one-week high in early trade, but then were pulled lower by a 2.5 percent fall in an index of auto stocks .SXAP . Goldman Sachs (NYSE:GS) said slow demand in China could hit earnings in the sector. pan-European FTSEurofirst 300 index .FTEU3 lost 0.71 percent and MSCI's gauge of stocks across the globe .MIWD00000PUS gained 1.71 percent.

Emerging market stocks rose 1.34 percent. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.64 percent higher, while Japan's Nikkei .N225 rose 1.29 percent.

CRUDE SLIDES, DOLLAR INCHES UP

Oil traders took profits after a three day run-up in prices, with losses extending after data showed U.S. crude inventories rose more than expected.

U.S. crude CLc1 fell 2.74 percent to $69.95 per barrel and Brent LCOc1 was last at $79.55, down 2.28 percent on the day.

The euro EUR= fell 0.38 percent to $1.1529 and Sterling GBP= was last trading at $1.3134, down 0.38 percent on the day.

The Japanese yen strengthened 0.15 percent versus the greenback at 112.09 per dollar. The dollar index .DXY rose 0.34 percent.

Minutes of the last Fed meeting, due Wednesday, should feed expectations of further tightening. Brazilian real rose against the dollar BRL= after data showed economic activity rose more than expected in August. Treasury yields continued to trade range-bound after a massive runup last week.

Benchmark 10-year notes US10YT=RR last rose 1/32 in price to yield 3.1539 percent, from 3.156 percent late on Tuesday.

The 30-year bond US30YT=RR last rose 2/32 in price to yield 3.3278 percent, from 3.33 percent late on Tuesday.

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