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Originally published Wednesday, January 16, 2013 at 3:34 AM

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Markets steady ahead of next batch of US earnings

Stocks were flat-footed Thursday as investors awaited the next batch of U.S. corporate earnings to see if there's further momentum to the rally that has pushed many indexes to multi-year highs.

AP Business Writer

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LONDON —

Stocks were flat-footed Thursday as investors awaited the next batch of U.S. corporate earnings to see if there's further momentum to the rally that has pushed many indexes to multi-year highs.

The markets have stalled over the past few days as investors move on from the relief generated by a budget deal in the U.S. and signs of progress in Europe's battle to contain its debt crisis.

Many market watchers think the quarterly U.S. corporate earnings reporting season could help provide direction.

"With a number of companies due to report before the opening bell in the U.S., with a particular focus on Bank of America and Citigroup, we should see trading activity pick up," said Craig Erlam, market analyst at Alpari. "There'll be a lot of attention on these two earnings reports in particular following the strong results from Goldman Sachs and JP Morgan yesterday."

Ahead of those releases, there was a lack of direction in Europe. Though the CAC-40 in France was 0.5 percent higher at 3,726, Germany's DAX was 0.3 percent lower at 7,671. The FTSE 100 index of leading British shares was down too, a modest 0.1 percent at 6,097.

Wall Street was poised for a subdued opening with both Dow futures and the broader S&P 500 futures 0.1 percent lower. How they open could hinge on the earnings reports, as well as developments related to Boeing Co., whose Dreamliner plane was grounded around the world because of technical glitches. Shares in the company fell 3 percent on Wednesday.

"Given it represents 4.2 percent of the Dow index, any further selling here will certainly have the potential to move the broader market," said Fawad Razaqzada, market strategist at GFT Markets.

Investors will also focus on a number of key U.S. economic releases ahead, including weekly jobless claims figures as well as December building permits.

The outlook for the U.S. economy, the world's largest, remains a key driver for markets amid signs that the Federal Reserve is growing more confident about the recovery.

On Wednesday, the Fed's regional assessment, the so-called Beige Book, found all 12 districts reporting "modest or moderate" growth in the final weeks of 2012 despite uncertainty over whether the White House and Congress could agree on a package of measures to avoid automatic tax rises and spending cuts at the start of this year. A last-minute deal was achieved, helping market sentiment in the first couple of weeks of 2013.

However, another looming battle over raising the U.S. debt ceiling is on the cards and that's contributed to this week's subdued market performance.

Worries that a deal to raise the ceiling will drag on are dogging the dollar. The euro was up a further 0.6 percent at $1.3362.

Earlier in Asia, Japan's Nikkei 225 index swung between gains and losses before closing nearly 0.1 percent higher at 10,609.64. On Wednesday, the Nikkei slid around 2.6 percent after investors interpreted comments from economy minister Akira Amari as suggesting he was concerned over the sharp fall in the yen in recent weeks.

"That misunderstanding has been cleared up by Amari, who clarified that he meant that the yen is still in the process of correcting back into line with fundamentals," said Lee Hardman, currency analyst at the Bank of Tokyo-Mitsubishi UFJ.

The impact of his comments on the yen was short-lived, with the dollar up 0.9 percent at 89.35 yen on Thursday.

South Korea's Kospi fell almost 0.2 percent to 1,974.27 while Hong Kong's Hang Seng changed direction after posting morning gains, slipping 0.1 percent to 23,339.76. Mainland China's Shanghai Composite Index fell 1.1 percent to 2,284.91 ahead of Friday's economic growth figures, which could provide broader direction across markets on the last day of the week.

Oil prices were steady, with the benchmark New York rate up 14 cents at $94.38 per barrel in electronic trading on the New York Mercantile Exchange.

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