World equities slide on China growth fears

Equities slid another day on disappointing earnings and on investors' concern that China might have to boost interest rates to keep inflation in check.

As China's growth increased to 9.8 per cent in the fourth quarter because of higher industrial production and retail sales, investors positioned themselves for the fact that policy makers in the world's second-largest economy might have to keep raising borrowing costs.

In early afternoon trading, the Dow Jones Industrial Average fell 0.30 per cent, the S&P 500 Index declined 0.48 per cent and the Nasdaq Composite Index dropped 1.08 per cent.

The Stoxx Europe 600 Index fell 1.2 per cent to 279.39 at the 4.30pm close in London,

"I do consider it to be the start of a something more," Marc Pado, US market strategist at Cantor Fitzgerald in San Francisco, told Reuters.

Other news that didn't sit well with investors was F5 Networks Inc's gloomy outlook.

The maker of software to handle internet traffic and content plunged 23 per cent after forecasting second-quarter revenue that fell short of analysts' forecasts.

Freeport McMoran Copper and Gold shed more than 4 per cent after it cut its sales forecast and said costs would rise.

"Earnings expectations have been very high, and the market has not been able to see enough positive news to keep prices at these high levels," Nick Kalivas, an analyst at MF Global in Chicago, told Reuters.

Bucking the trend somewhat was Morgan Stanley which posted stronger-than-expected quarterly revenue and retail brokerage profit jumped.

While fourth-quarter profit fell short of forecasts, investors focused on the bank's stronger results in areas like asset management.

The stock climbed 3.6 per cent.

The latest economic data were positive but failed to turn around sentiment on the stock market today. US home resales jumped more than expected in December while US initial jobless claims posted their biggest weekly decline in nearly a year.

The reports did support the greenback against other major currencies, pushing the US dollar index 0.27 per cent higher.

The euro slipped 0.02 per cent against the US dollar, trading at US$1.3463.

The dollar rose 1.12 per cent to 82.98 yen.

EasyJet tanked 16 per cent after forecasting a first-half loss because of higher fuel costs.

US crude futures fell by US$2.35 per barrel to US$88.51 per barrel by 1649 GMT, while ICE Brent futures for March were down US$1.80 at US$96.36 per barrel.

The March spread between the two grades was close to US$7 as the unusually wide Brent premium persisted following figures from the Energy Information Administration showing US crude stocks unexpectedly rose 2.62 million barrels in the week to January 14.

That compared with expectations of a 600,000 barrel draw.