US stocks fall on open
US stocks fell at the open today as concerns over Spain's rising borrowing costs resurfaced and after disappointing Chinese growth data.
The Dow Jones industrial average fell 22.86 points, or 0.18 per cent, at 12,963.72. The Standard & Poor's 500 Index lost 3.39 points, or 0.24 per cent, at 1,384.18. The Nasdaq Composite Index dipped 11.26 points, or 0.37 per cent, at 3,044.29.
World shares held steady after China's first-quarter growth failed to meet expectations, clouding the outlook for the world's second largest economy but raising the prospect of more policy stimulus from Beijing.
By 1.45pm, the MSCI world stock index was down 0.1 per cent on the day, with Asian shares holding up well and Europe's on the slide.
Above-forecast earnings from US investment bank JPMorgan Chase and a modest 0.3 per cent rise in US consumer prices in March failed to give stocks a fillip, with the Chinese data and a renewed rise in Spanish borrowing costs casting a longer shadow.
Copper and oil both retreated on concerns about demand from China, a voracious buyer of commodities.
Chinese growth eased to an annual rate of 8.1 per cent in the first quarter from 8.9 per cent in the previous quarter, below an 8.3 per cent forecast and the weakest pace in nearly three years.
It was the fifth consecutive quarter of slowing GDP in the world's most dynamic economy, on which hopes are pinned to sustain global growth, suggesting its slowdown is not over yet and more policy action would be needed to halt it.
"We still believe there should be more policy relaxation to add to growth domestically and offset weakness in exports," said Kevin Lai, economist at Daiwa in Hong Kong.
He said Thursday's stronger-than-expected Chinese new lending data was "an indication the government is quite ready to provide more monetary policy support to show that at least the economy is on track for a soft landing".
MSCI's broadest index of Asia Pacific shares outside Japan climbed 1.1 per cent.
The FTSEurofirst 300 index of top European shares shed 1 per cent, on track for a fourth consecutive week of losses. US stock futures fell on concerns over Spain's rising borrowing costs and the disappointing Chinese data.
Spain, now at the centre of the euro zone debt storm, saw its bond yields jump again after data showing Spanish banks borrowed heavily from the European Central Bank in March. The cost of insuring its debt against default hit an all-time high.
The country's borrowing costs have spiked since the government ripped up a previously agreed deficit target in March, having dropped sharply earlier in the year thanks to a liquidity infusion of more than €1 trillion by the ECB.
"This benign environment has come to an end. It's not that easy anymore for the financing agencies in Spain and Italy to sell their paper," said Michael Leister, strategist at DZ Bank.