GLOBAL MARKETS-Downbeat U.S. earnings cap investor enthusiasm; euro drops on soft data

* Boeing, Caterpillar earnings disappoint
* New U.S.-China trade talks expected next week
* European stocks flat following weak PMIs
* Euro hits two-month low

(New throughout, updates prices, market activity and comments
to U.S. afternoon trading)
By Stephen Culp
NEW YORK, July 24 (Reuters) - U.S. stocks were mixed on
Wednesday as a series of disappointing second-quarter results
curbed investor optimism over a new round of U.S.-China trade
talks next week, while the euro dropped to a two-month low,
pressured by soft economic data.
Boeing Co BA.N and Caterpillar Inc CAT.N shares took a
dive after their second-quarter earnings fell short of analyst
expectations. The industrial bellwethers were the biggest drag
on the blue chip Dow.
Boeing posted its biggest loss in a decade, owing to the
grounding of its 737 MAX aircraft, while Caterpillar was
challenged by weak China sales in the face of the trade
war. "Tariffs are starting to hit profits for large multinational
companies and are one reason global economic growth is
softening," said David Carter, chief investment officer at Lenox
Wealth Advisors in New York. "Thankfully, the Fed is aware of
this and is likely to lower rates next week."
Investors had been heartened in recent days by hopes for
trade negotiations and expectations the European Central Bank
and the U.S. Federal Reserve will ease monetary policy.
The Dow Jones Industrial Average .DJI fell 116.76 points,
or 0.43%, to 27,232.43, the S&P 500 .SPX gained 4.53 points,
or 0.15%, to 3,010 and the Nasdaq Composite .IXIC added 32.02
points, or 0.39%, to 8,283.42.
A series of purchasing manager index (PMI) readings in the
United States and Europe were weaker than expected, capping
gains in equity markets worldwide.
"Economic growth in Europe continues to clearly slow,"
Carter added. "There's tremendous uncertainty in Europe and the
ECB may be out of bullets."
The pan-European STOXX 600 index .STOXX rose 0.05% and
MSCI's gauge of stocks across the globe .MIWD00000PUS gained
0.13%.
PMI data showed euro zone manufacturing contracting for the
sixth straight month, dragging the euro to a two-month low
against the dollar. The dollar index .DXY , tracking the greenback against six
major currencies, fell 0.04%, with the euro EUR= down 0.08% to
$1.1142.
Sterling GBP= was last trading at $1.2494, up 0.47% on the
day, after falling for several sessions as market participants
feared the looming possibility of a no-deal Brexit under
Britain's new prime minister, Boris Johnson.
The Canadian dollar fell 0.04% versus the greenback at 1.31
per dollar.
"Throughout the world there's now a race to have the least
expensive currency," said Carter. "This is one reason so many
central banks are easing policy."
U.S. Treasuries yields fell in line with yield declines in
European government debt after the downbeat economic data fueled
expectations that the European Central Bank will cut interest
rates. Benchmark 10-year notes US10YT=RR last rose 7/32 in price
to yield 2.0515%, from 2.074% late on Tuesday.
The 30-year bond US30YT=RR last rose 17/32 in price to
yield 2.5828%, from 2.607% late on Tuesday.
Oil prices inched up in the face of a large decrease in U.S.
crude stockpiles as investors fretted about global oil demand.
U.S. crude CLcv1 rose 0.16% to $56.86 per barrel and Brent
LCOcv1 was last at $64.21, up 0.6% on the day.
Spot gold XAU= added 0.4% to $1,422.97 an ounce but
remained short of last week's peak of $1,452.60.

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