Shares drift as US indexes pull back from highs

The Associated Press

LONDON (AP) — Stock markets fell Tuesday as U.S. indexes pulled back from record highs ahead of the start of the quarterly U.S. corporate earnings reporting season.

Over the coming weeks, earnings will feature large in investors' thoughts as they try to gauge the state of the U.S. economy. Aluminum company Alcoa unofficially kicks the latest earnings season off later with its second quarter results.

"A second consecutive down day in US markets has seen the gains of last week eroded, and a renewal of calls for a correction," said Chris Beauchamp, market analyst at IG. "Still, it is more a combination of uncertainty ahead of earnings season and the usual dire summer volumes."

In Europe, France's CAC-40 closed down 1.4 percent at 4,342.53 while Germany's DAX dropped 1.4 percent too, to 9,772.67. Britain's FTSE 100 fell 1.3 percent to 6,738.45.

In the U.S., the Dow Jones industrial average was 0.8 percent lower at 16,884 while the broader S&P 500 index fell 0.9 percent to 1,961.

Earlier in Asia, Japan's Nikkei 225 index tracked Wall Street's previous day's declines, slipping 0.4 percent to 15,314.41 despite fresh data showing the current account surplus was larger than expected in May. South Korea's Kospi regained lost ground, rising 0.1 percent to 2,006.66. Hong Kong's Hang Seng ended flat at 23,541.38.

As well as awaiting U.S. earnings this week, investors will be interested to see the latest Chinese inflation figures on Wednesday.

Elsewhere, trading was fairly muted, with the euro up 0.1 percent at $1.3615 and the dollar 0.3 percent lower at 101.52 yen. Meanwhile, a barrel of benchmark New York crude was 11 cents lower at $103.41.