GLOBAL MARKETS-Trade, earnings caution weigh on stocks; oil drops

* MSCI world equity falls for third straight day
* European shares bounce on ECB inflation revamp report
* Oil slumps as production pick up eyed

(Updates with open of European markets)
By Chuck Mikolajczak
NEW YORK, July 18 (Reuters) - A gauge of global stocks lost
ground for a third straight session on Thursday on worries over
how the trade war between the United States and China could take
a toll on corporate earnings, while oil prices dropped on
expectations of rising output.
On Wall Street, shares of Netflix NFLX.O plunged 10.97% in
the wake of its quarterly results as it missed targets for new
subscribers overseas. Honeywell HON.N , up 2.15%, helped curb losses as its
results topped expectations and it raised its full-year outlook.
However, the diversified manufacturer said it is planning
"somewhat cautiously" for the second half due to volatile
geopolitical and economic movements. "The stock market seems to be running out of energy," said
John Augustine, chief investment officer of Huntington Private
Bank in Columbus, Ohio.
"Earnings have met expectations, but companies are being
cautious about future quarters, which is something that's not
able to keep the S&P 500 above the 3,000 level," Augustine said.
Earnings are now expected to show growth of 0.6% for the
second quarter, according to Refinitiv data. S&P 500 companies
were expected to show a decline as recently as Tuesday. The
ratio of negative to positive earnings preannouncements is 3.8,
above the 2.7 average since 1997 and the 1.9 for the prior four
quarters.
U.S. and Chinese officials were scheduled to have a phone
call later on Thursday on trade, U.S. Treasury Secretary Steven
Mnuchin told CNBC. The Dow Jones Industrial Average .DJI fell 80.95 points,
or 0.3%, to 27,138.9, the S&P 500 .SPX lost 1.02 points, or
0.03%, to 2,983.4 and the Nasdaq Composite .IXIC dropped 20.75
points, or 0.25%, to 8,164.46.
In Europe, stocks were initially weaker as disappointing
earnings from software firm SAP SAPG.DE pulled down its shares
as much as 10%, dragging the technology sector with it, as it
flagged the impact of the U.S.-China trade war.
But the Euro STOXX 600 .STOXX managed to close of its lows
on hopes of looser monetary policy from the European Central
Bank policy. The pan-European STOXX 600 index .STOXX lost 0.22% and
MSCI's gauge of stocks across the globe .MIWD00000PUS shed
0.22%.
In commodities, oil slumped more than 2% on an expectation
that crude output would rise in the Gulf of Mexico following
last week's hurricane in the region. U.S. Treasury yields edged higher after economic data on
manufacturing in the U.s. mid-Atlantic region rebounded, while
weekly jobless claims showed the country's labor market remains
strong. Despite a flurry of strengthening economic data recently,
market participants consider it a certainty the Federal Reserve
will cut rates by at least a quarter of a percentage point at
its July 30-31 meeting. Benchmark 10-year notes US10YT=RR last fell 2/32 in price
to yield 2.0659%, from 2.061% late on Wednesday.
In currencies, the dollar slipped slightly in the wake of
the data while the euro lost ground following the report on the
European Central Bank that its staff is studying a potential
change to its inflation goal. Sterling rose, in part after a
vote by lawmakers to make it harder for Britain's next prime
minister to try to force a no-deal Brexit. The dollar index .DXY fell 0.07%, with the euro EUR= was
up 0.01% to $1.1224. Sterling GBP= was last trading at
$1.248, up 0.39% on the day.

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Global assets in 2019 http://tmsnrt.rs/2jvdmXl
Global currencies vs. dollar http://tmsnrt.rs/2egbfVh
MSCI All Country Wolrd Index Market Cap http://tmsnrt.rs/2EmTD6j
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