GLOBAL MARKETS-US stocks flat as earnings in focus; dollar steady

Reuters - UK Focus

* Poor IBM results weigh heavily on S&P, Dow

* Treasury prices down on weaker German govt debt

* Dollar holds on bets over Fed stimulus cut

* Sterling shines on expectations for UK rate hike

By Barani Krishnan

NEW YORK (Frankfurt: HX6.F - news) , Jan 22 (Reuters) - U.S. stocks were little changedon Wednesday, as investors played off a mixed bag of companyearnings, while the dollar held steady against most majorcurrencies ahead of next week's Federal Reserve meeting, whereanother cut in stimulus is seen possible.

Treasuries prices fell and benchmark yields edged up fromfive-week lows, with prices dragged lower by weaker Germangovernment debt.

On Wall Street, IBM (NYSE: IBM - news) missed revenue expectations for a fourthstraight quarter, driving down shares of the world's largesttechnology services company by nearly 4 percent, making them thebiggest drag on the market.

Shares of Coach Inc (NYSE: COH - news) , the luxury handbag maker, alsotumbled, stung by disappointing sales in North America.

"There has been little so far to excite the masses and it isgoing to lead many to question. Can this market hang in therewith a flat earnings environment?" said Andre Bakhos, managingdirector at Janlyn Capital LLC in Bernardsville, New Jersey.

The Dow Jones industrial average was down 36.92points, or 0.22 percent, at 16,377.52. The Standard & Poor's 500Index was up 1.34 points, or 0.07 percent, at 1,845.14.The Nasdaq Composite Index was up 17.98 points, or 0.43percent, at 4,243.74.

IBM lost 3.3 percent to $182.22, weighing heavily onboth the Dow and S&P 500. The company was hit in the latestquarter by weakening demand, particularly in growth markets likeChina.

Coach tumbled 7 percent to $48.86, the worst performer onthe S&P 500, on declining North American sales and market sharein the handbag business to fast-growing rivals.

On the upside, both United Technologies Corp (NYSE: UTX - news) andrailroad company Norfolk Southern (Frankfurt: NFS.F - news) reported strongquarterly earnings.

Shares of United Technologies, the world's largest maker ofelevators and air conditioners, were up 0.8 percent at $115.92.The company reported higher fourth-quarter profit that toppedWall Street estimates, though revenue fell shy of expectations.

Norfolk Southern posted a 24 percent rise in quarterlyincome, driving its shares up 4.4 percent at $92.61. The shareshad risen more than 6 percent earlier, helping the Dow JonesTransportation average hit a record high.

An upgrade of the International Monetary Fund's worldforecasts lifted sentiment in global equities, keeping worldstocks steady..

World stocks as measured by the MSCI (NYSE: MSCI - news) world equity index.MIWD00000PUS> edged up 0.07 percent.

The pan-European FTSEurofirst closed up 0.1 percentat 1,347.05, leaving it just shy of a multi-year high touched onTuesday at 1,353.47. The euro zone's blue-chip STOXX 50 shed 0.1 percent to 3,151.27 points.

The dollar slipped against sterling and the Australiandollar while holding against other major currencies, asmeasured against a basket of currencies.

Investors expect the Fed, when it meets on Monday andTuesday, to make another $10 billion cut to its monthlybond-buying program after last month's reduction brought itsmonthly purchases of bonds to $75 billion.

The benchmark 10-year U.S. Treasury note was down 9/32, withthe yield at 2.8563 percent. The 10-year yield hit 2.818 percenton Friday, its lowest level since Dec. 11, according to Reutersdata.

Sterling hit a three-week high against the dollar and aone-year high against the euro.

The pound rallied after a sharper-than-expected fall in UKunemployment, to 7.1 percent, provided fresh proof of astrengthening economy and bolstered speculation that a Bank ofEngland rate increase may not be too far off.

Minutes from the BoE (Shenzhen: 000725.SZ - news) 's last meeting, released at the sametime as the data, showed policymakers now acknowledgedunemployment was likely to fall to the 7 percent threshold theyhave set for reviewing the bank's policy, "materially earlier"than expected.

"It will certainly be the big challenge for Bank of EnglandGovernor Mark Carney and the (Monetary Policy Committee) inmanaging the forward guidance," said Michael Hewson, chiefstrategist at CMC Markets. "What does he do when it does hit 7percent? ... I think the only way is up for the pound."

Among commodities, oil climbed on expectations thataccelerating growth in industrialized economies would liftdemand. U.S. crude oil futures rose almost 2 percent to$96.77 a barrel, its highest since Jan. 2.

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