LONDON (AP) -- A sketchy agreement on how to create a single European
banking supervisor failed to impress markets on Friday, with stocks
drifting lower ahead of another round of U.S. corporate earnings
statements and after a shock trading update from Google.
On Thursday, Google surprised investors by
publishing by mistake its worse-than-expected earnings ahead of
schedule. After billions were wiped off the internet giant's market
value, the company suspended trading in its shares.
Microsoft also disappointed with its latest update, contributing to a broad retreat in technology stocks. "After what had started to look like a
relatively upbeat season, investors are now looking a little more wary,"
said Fawad Razaqzada, market strategist at GFT Markets.
Highlights later include earnings reports from McDonald's, General Electric and Honeywell.
By mid-morning in Europe, Germany's DAX was
down 0.3 percent at 7,412 while the CAC-40 in France fell 0.2 percent to
3,527. The FTSE 100 index of leading British shares as flat at 5,918.
Wall Street was poised for a subdued opening with both Dow futures and the broader S&P 500 futures down 0.1 percent.
An agreement early Friday by the leaders of the
17 euro countries to push ahead with a single banking supervisory body
failed to support markets. The leaders remained vague on key details,
such as when the supervisor will be up and running.
Some investors and analysts worry that Europe's
politicians may have lost the incentive to fix things quickly now that
market turmoil has subsided. The borrowing costs of countries like Spain
have eased since the European Central Bank unveiled in September a new
bond-buying program.
"Europe's politicians seem to have kicked
things into the long grass for a few more months as they fail to agree
on steps towards banking supervision or closer integration," said
Rebecca O'Keeffe, head of investment at Interactive Investor. "As
interest rates continue to fall, so the need to act decisively
diminishes."
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