United States stocks were mixed on Tuesday while European shares snapped a three-day winning streak and oil slipped on fear central banks may not deliver enough stimulus to quell concerns about a global slowdown, Reuters reported.

Equities and oil had been climbing steadily since European Central Bank President Mario Draghi said last week he would do whatever it took to save the euro. Markets interpreted that to mean the ECB could announce at its Thursday meeting plans to lower Spanish and Italian borrowing costs by buying those countries’ bonds.

Flagging growth in the United States had also raised hopes the Federal Reserve, which begins a two-day rate-setting meeting on Tuesday, would step up bond purchases of its own, though most economists expect it to hold its fire until September.

“The markets have run ahead of themselves. And I think certainly the ECB and the Federal Reserve will hold back from pumping in more money at this point in time,” said Manoj Ladwa, head of trading at TJ Markets.

Neither central bank is expected to stay on the sidelines for long, though, and that has helped pull the euro off two-year lows and underpin U.S. stocks’ best year-to-date rise since 2003.

The euro was last up 0.4 per cent at $1.2311, while US government bonds also rose, with the benchmark 10-year US note up 6/32 in price to yield 1.48 per cent.

But some traders said the ECB may not be able to live up to expectations, particularly if news from the debt-stricken euro zone continues to worsen.

Capital flight from Spain gathered pace in May while the central government’s deficit widened, raising fears that the country may soon need a full-scale bailout.

“Everybody is waiting for Thursday to see if Draghi can deliver,” said Lex van Dam, hedge fund manager at Hampstead Capital, which manages $500m of assets. “He’d better pull a big rabbit out of his hat.”

Internal debate within the ECB could mean that bold action is still weeks away.

“There is a clear danger that expectations might be too high,” said Nick Parsons, head of market strategy at nabCapital in London.

The safe-haven German bond market reflected those concerns as the premium investors demand to hold Spanish or Italian 10-year bonds over German ones widened.

With 303 of S&P 500 companies having reported quarterly earnings, 66 percent have beaten analysts’ expectations. The average over the past four quarters is 68 per cent.

Source: Punch