LONDON (AP) -
Stocks suffered one of their
worst sessions in weeks on Tuesday following another batch of weak U.S.
corporate earnings and uncertainty over the outcome of the race for the
White House.
So far, quarterly earnings
coming out of the U.S. have been mixed, particularly from the technology
sector. Downbeat updates on Tuesday from chemical company DuPont and
manufacturer 3M added to the prevailing uncertainty.
"We are currently in the third week of a disappointing corporate earnings season," said Craig Erlam, market analyst at Alpari.
Facebook unveils its
quarterly earnings after the markets close in a statement that could be
crucial for the social network's future. The company has had a dire time
since its stock flotation in May, losing more than a third of its value
as investors became 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.
"The accompanying
uncertainty of being able to make any early calls over a likely winner
is certainly going to create an air of unease across the board," said
Fawad Razaqzada, market strategist at GFT Markets.
By mid-afternoon in Europe,
Germany's DAX was down 2 percent at 7,185 while the CAC-40 in France
fell 2.1 percent to 3,412. The FTSE 100 index of leading British shares
was down 1.3 percent at 5,806.
In the U.S., the main
indexes were close to seven week lows with the Dow Jones industrial
average 1.8 percent lower at 13,106 while the broader S&P 500 index
was off 1.7 percent to 1,409.
In recent weeks, markets
have been largely buoyant amid signs that Europe was getting a grip on
its debt crisis. Hopes that Spain will soon tap a new bond-buying
facility from the European Central Bank have helped calm jitters over
the eurozone's fourth largest economy but so far the Spanish government
has made no request.
With its economy in a deep
recession - figures from the Spanish central bank showed the country's
economy shrinking by a further quarterly rate of 0.4 percent in the
third quarter - investors are getting fidgety again. The yield on the
country's 10-year bonds, a gauge of investor unease, has risen for the
second day running, up a further 0.10 percentage point to 5.58 percent.
The euro has also taken a pounding, falling 0.8 percent at $1.2968, its first move below $1.30 since Oct. 15.
Earlier in Asia, stock
indexes fared slightly better. Japan's Nikkei 225 index eked out a
marginal gain to close at 9,014.25 a day after the country's currency
fell to a three-month low against the dollar.
A weak yen helps Japan's
mammoth export sector by raising the value of company profits
repatriated from abroad. Still, grim export data - which Monday showed a
10 percent drop in exports for September compared with a year earlier -
kept advances in check.
South Korea's Kospi
declined 0.8 percent to 1,926.81 but mainland Chinese stocks lost
ground, with the Shanghai Composite Index down 0.9 percent to 2,114.45.
The Shenzhen Composite Index lost 1.4 percent to 869.96.
Hong Kong markets were closed for a public holiday.
Oil prices took a hit amid
the increasing market gloom - benchmark oil for December delivery was
down $2.39 to $86.21 per barrel in electronic trading on the New York
Mercantile Exchange.
