U.S. stocks tumble as Treasuries rise with gold on China data

Fed Stimulus

Fed officials scrutinize labor data to determine the timing and pace of any reductions to their stimulus. The central bank, which next meets Jan. 28-29, decided at its December meeting to start cutting its monthly bond purchases by $10 billion to $75 billion.

Treasuries rose, snapping two days of losses. The U.S. 10- year yield fell 9 basis points to 2.78%, extending its decline below the level when the Fed voted last month to taper its bond-buying stimulus.

“We’re still looking for an acceleration in global growth and none of the data we saw this morning changed that,” John Canally, economic strategist at LPL Financial Corp., said in a phone interview from Boston. His firm oversees about $414.7 billion.

Investors this week have also been analyzing earnings from International Business Machines Corp. to Delta Air Lines Inc. and Coach Inc. Of the 101 index members that have posted results so far this season, 73% have beaten estimates for profit and 66% have exceeded sales projections, according to data compiled by Bloomberg.

Earnings Season

Per-share profit for companies in the benchmark probably climbed 6% in the fourth quarter, while sales increased 2.2%, according to analysts surveyed by Bloomberg.

Nine of the 10 main groups in the S&P 500 retreated today. The Morgan Stanley Cyclical Index tumbled 1.5%. Cliffs Natural Resources Inc. slipped 4.5% as raw-materials producers dropped 2% for the biggest decline. JPMorgan Chase & Co. and American Express Co. slid at least 2.2% to pace losses among financial firms.

American Eagle Outfitters Inc. lost 7.7% after saying its chief executive officer is leaving. Netflix Inc. surged 17% as it projected customer growth that topped analysts’ estimates. Union Pacific Corp. climbed 3.2% as the railroad’s profit beat forecasts.

European shares dropped the most since Dec. 3 after reaching the highest level since 2008 yesterday.

European Stocks

U.K. publisher Pearson Plc lost 8.2% after JPMorgan Chase & Co. said full-year earnings will miss estimates. EasyJet Plc fell 4.1% after Europe’s second-biggest discount airline said it expects to report a first-half 2014 pretax loss of as much as 90 million pounds ($149 million), compared with a loss of 61 million pounds a year earlier. Nokia Oyj slid 11% after it predicted shrinking profit margins for its network-equipment division.

Logitech International SA, the world’s biggest maker of computer mice, rallied 18% after reporting quarterly profit and sales that exceeded analysts’ estimates. Delhaize Group SA rose 7.2% as the owner of the Food Lion supermarket chain said fourth-quarter results in the U.S. and Belgium beat estimates.

The MSCI gauge of developing nations fell the most since November. The Hang Seng China Enterprises Index of mainland companies listed in Hong Kong declined 2.1% and the Shanghai Composite Index lost 0.5%. The preliminary reading of 49.6 for a Purchasing Managers’ Index released today by HSBC and Markit compares with a final figure of 50.5 in December and a 50.3 median estimate of 19 analysts in a Bloomberg survey.

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