Stocks Drop Following U.S. Lead; Treasuries Steady: Markets Wrap

A man wipes his head as he is reflected on a stock quotation board outside a brokerage in Tokyo June 10, 2014. Asia stocks nudged three-year highs on Tuesday on rising optimism over global growth prospects and a record-run on Wall Street, helping lift Treasury yields and the dollar. REUTERS/Issei Kato (JAPAN - Tags: BUSINESS)

Asian stocks followed their U.S. counterparts lower as worries about the earnings outlook weighed on industrial and technology shares. The 10-year Treasury yield steadied after piercing the 3 percent level for the first time in four years.

Shares from Tokyo to Hong Kong dropped and equity futures signaled losses may be in store for Europe. U.S. stock futures extended a decline after shares closed lower overnight as a slew of companies considered as economic bellwethers warned on profit forecasts. The dollar climbed back toward its highest since January, while the Aussie and kiwi dollars were weaker. The yen slipped to its lowest since early February and the euro fell.

Investors are weighing the implications of climbing bond yields, which have been spurred in part by higher commodity prices and concern surrounding their inflationary impact. Even so, volatility in interest-rate markets remains low and equity-price swings are well off the highs seen earlier this year.

Elsewhere, oil drifted below $68 a barrel while industrial metals were mixed. Australian equity and bond markets are shut for a holiday.

These are some important events coming up this week:

U.S. GDP data are due Friday. Earnings season continues. Among those reporting: Amazon.com and Samsung. The European Central Bank has a rate decision on Thursday. Investors will watch for any sign that officials are preparing a shift in stimulus plans for their June meeting. The Bank of Japan announces its latest policy decision Friday and releases a quarterly outlook report. The leaders of North and South Korea meet Friday.

And these are the main moves in markets: Stocks

The MSCI Asia Pacific Index fell 0.5 percent as of 3:02 p.m. Tokyo time. Topix index fell 0.1 percent. Hong Kong’s Hang Seng Index declined 1.1 percent. Kospi index sank 1 percent. Futures on the S&P 500 Index fell 0.2 percent.

Currencies

The Bloomberg Dollar Spot Index rose 0.2 percent. The Japanese yen fell 0.2 percent to 109.08 per dollar. The euro fell 0.2 percent to $1.2213.

Bonds

The yield on 10-year Treasuries fell less than one basis point to 3.00 percent. Japan’s 10-year yield rose one basis point to 0.06 percent.

Commodities

West Texas Intermediate crude fell less than 0.05 percent to $67.69 a barrel. Gold fell 0.3 percent to $1,326.48 an ounce. LME copper fell 0.7 percent to $6,965.50 per metric ton.

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