PARIS (AP) — An unexpected slump in U.S. home sales data pushed world markets lower Tuesday as investors also digested an underwhelming Japanese stimulus program and a slew of poor earnings from American companies.
Even surprisingly good results from a German investor confidence survey couldn't cheer markets for long.
The day began with the Bank of Japan's announcement that it will set a 2 percent inflation target and implement open-ended bond purchases that will pump money into the financial system. Many found the bank's new program did not live up to expectations.
In Europe, the DAX in Germany slid 0.68 percent to close at 7,696 Tuesday, while France's CAC-40 fell 0.59 percent to 3,741. The FTSE index of leading British shares ended the day barely changed, down 0.03 percent at 6,179. The euro also barely moved; down 0.02 percent to $1.330.
"'Please, sir, I want more,' said Oliver Twist, fed up with a diet of thin gruel. Such is the market's response to news in Japan," said Kit Juckes, an analyst with Societe Generale.
He said investors were disappointed that the inflation target has no fixed time limit, that bond purchases are skewed to the shorter maturities and that they will not start soon.
The day was also heavy with American companies reporting their results, many of which were disappointing. But it was an unexpected slide of 1 percent in U.S. home sales in December — the first drop since September — that sealed the downward trend.
Wall Street was up slightly after being closed Monday for a holiday. The Dow Jones Industrial average was trading up 0.25 percent higher at 13,683, while the broader Standard & Poor's 500 index was up 0.14 percent to 1,487.9.
Jennifer Lee, an economist with BMO Capital Markets, predicted the disappointment would be short-lived.
"A disappointing U.S. housing report but nothing to get worked up over," she wrote in a note to clients. "The growing economy and improving job market will continue to support the housing sector."
Earlier in Asia, Japan's Nikkei 225 index finished the day down 0.4 percent at 10,709.93 after volatile trading on the back of the central bank's announcement. Australia's S&P/ASX 200 rose marginally to 4,779.10. Hong Kong's Hang Seng reversed morning losses to rise 0.3 percent to 23,658.99.
Mainland Chinese shares fell. The Shanghai Composite Index lost 0.6 percent to 2,315.14. The smaller Shenzhen Composite Index lost 1.4 percent to 928.90.
South Korea's Kospi rose 0.5 percent to 1,996.52 after Finance Minister Bahk Jae-wan said the country will help exporters struggling with the rise of the won, Yonhap News Agency said.
The remarks come amid worries that monetary stimulus moves by the U.S. and Japan could result in the further appreciation of the Korean currency.
Benchmark oil contract for February delivery was up 61 cents to $96.64 per barrel in electronic trading on the New York Mercantile Exchange.
Pamela Sampson in Bangkok and Fu Ting in Shanghai contributed to this report.
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