San Francisco Frontiers - Google drags down Wall Street stocks

After a mostly downbeat showing across Asia, Europe advanced, with the European Central Bank leaving interest rates unchanged after the Federal Reserve maintained US borrowing costs on Wednesday.

The euro dipped after Christine Lagarde announced she would step down as the ECB's president in February, but then rose as she signalled a likely rate hike in December.

Crude prices shed more than one percent on reports of renewed diplomatic efforts between the United States and Iran to avoid further strikes.

Wall Street's main stock indices were lower in midday trading, with the tech-heavy Nasdaq Composite dropping 1.3 percent.

Shares in Alphabet plunged 12 percent. Google's parent company reported after Wednesday's close of trading lower-than-expected profits while it maintained big spending on artificial intelligence.

"It is a rare day when the three big US indices retreat but the small caps gain in tandem with a broad advance in Europe," said market analyst Chris Beauchamp at online trading and investing platform IG.

He noted tech fears had spread to encompass Caterpillar, the construction equipment manufacturer that is the second biggest stock on the Dow index, which faces higher costs to finance its heavy debt load as booming AI infrastructure spending drives up borrowing rates.

Underwhelming results from South Korea's Samsung Electronics also added to doubts about the returns on AI spending.

Samsung, the world's largest maker of memory chips, delivered record quarterly profits but missed market expectations in its semiconductor division.

South Korea's Kospi shares index closed down 1.2 percent, while Hong Kong and Shanghai also fell. Tokyo finished higher.

In other tech news, Microsoft posted forecast-topping revenue and profit, fuelled by its Azure cloud computing division. Its shares initially rose but then fell into the red.

"Tech earnings will remain in focus today with Amazon and Intel reporting" after the US close, said Deutsche Bank's Jim Reid.

Markets had enjoyed a healthy run-up in the previous two days as traders welcomed strong reports from South Korean chip titan SK hynix and an impressive IPO filing from Claude-creator Anthropic.

There was little major reaction to the Federal Reserve's widely expected decision to hold interest rates, as it cited the need for more data in the fight against inflation, which has held stubbornly above officials' two-percent target for five years.

Personal consumption expenditures data, the Fed's preferred inflation gauge, showed that core prices that exclude volatile food and energy products rose by 3.1 percent year-on-year in September.

"Both headline and core PCE rose to their highest levels since May, underscoring that inflation remains a stubborn issue," said eToro US investment analyst Bret Kenwell.

Over three-quarters of investors believe the Fed will raise interest rates in December, according to CME's FedWatch tool.

Meanwhile the US economy grew at a better-than-expected annualised rate of 3.4 percent in the third quarter, beating expectations.

- Key figures at around 1630 GMT -

New York - Dow: DOWN 0.3 percent at 52,304.38 points

New York - S&P 500: DOWN 0.3 percent at 7,718.19

New York - Nasdaq Composite: DOWN 1.3 percent at 26,206.74

London - FTSE 100: UP 0.3 percent at 10,722.07 (close)

Paris - CAC 40: UP 1.1 percent at 7,970.00 (close)

Frankfurt - DAX: UP 1.3 percent at 26,039.68 (close)

Tokyo - Nikkei 225: UP 1.1 percent at 64,659.47 (close)

Seoul - Kospi: DOWN 1.2 percent at 5,937.66 (close)

Hong Kong - Hang Seng Index: DOWN 0.6 percent at 22,958.65 (close)

Shanghai - Composite: DOWN 0.8 percent at 3,651.43 (close)

West Texas Intermediate: DOWN 1.8 percent at $100.96 per barrel

Brent North Sea crude: DOWN 1.3 percent at $113.85 per barrel

Euro/dollar: UP at $1.1164 from $1.1154 on Wednesday

Pound/dollar: UP at $1.3371 from $1.3320

Dollar/yen: DOWN at 157.85 yen from 158.03 yen

Euro/pound: DOWN at 83.50 pence from 83.71 pence

dan-ajb-rl/gv

D.Parker--SFF