July 17, 2019 / 6:17 PM / a month ago

GLOBAL MARKETS-Stocks fall on trade, earnings worry; U.S. Treasury yields fall

* U.S. housing starts sluggish for second month

* World shares on track for second straight decline

* S&P 500 dips back below 3,000 mark (Updates with close of European markets)

By Chuck Mikolajczak

NEW YORK, July 17 (Reuters) - A gauge of global stocks declined for a second straight session and U.S. Treasury yields fell as trade concerns began to percolate and the pace of the U.S. corporate earnings season picked up.

On Wall Street, CSX Corp was one of the biggest drags on the benchmark S&P 500 index. The railroad tumbled 9.72% after it reported quarterly earnings that missed expectations and cut its full-year revenue forecast on weakness in its trade-related intermodal business.

The results come after U.S. President Donald Trump renewed his threat to tax another $325 billion of Chinese goods on Tuesday, which weighed on stocks. In addition, the U.S. could also face Chinese sanctions, following a World Trade Organization ruling on Tuesday, further complicating trade talks between the two countries.

U.S. stocks have eased over the past two sessions in part due to a sluggish start to the quarterly earnings season. Those declines also follow a rally that sent key stock averages to record peaks on expectations for lower U.S. rates.

“People are taking action prior to the reports out of fear that some of these numbers are going to be bad,” said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco.

“It is uncertainty and we know how Wall Street deals with uncertainty.”

Big banks such as Citi, JPMorgan and Wells Fargo have recorded drops in net interest margins, a sign low interest rates are hurting their bottomlines.

Bank of America shares were up 2.1% after it reported results on Wednesday but lowered its annual net interest income guidance.

While it is still early in what is expected to be a lackluster reporting season, the earnings growth rate for the second quarter now stands at 0.4%, according to Refinitiv data. Expectations were recently calling for a quarterly decline in S&P 500 results.

The Dow Jones Industrial Average fell 35.4 points, or 0.13%, to 27,300.23, the S&P 500 lost 7.18 points, or 0.24%, to 2,996.86 and the Nasdaq Composite dropped 2.62 points, or 0.03%, to 8,220.18.

European shares closed lower as weakness in Swedish shares on some disappointing quarterly results and a decline in shares of oil majors helped snap a three-day winning streak.

The pan-European STOXX 600 index lost 0.37% and MSCI’s gauge of stocks across the globe shed 0.22%.

Along with the trade concerns, U.S. Treasury yields moved higher after data showed weakness in the housing market for a second straight month.

“The housing starts were a little weaker but the building permits were definitely significantly weaker,” said Justin Lederer, an interest rates strategist at Cantor Fitzgerald in New York.

Benchmark 10-year notes last rose 17/32 in price to yield 2.0625%, from 2.12% late on Tuesday.

The dollar retreated after notching strong gains on Tuesday following better-than-expected monthly retail sales data, while Sterling bounced after touching a 27-month low versus the greenback as no-deal Brexit concerns mounted.

The dollar index fell 0.19%, with the euro up 0.13% to $1.1224. Sterling was last trading at $1.2439, up 0.29% on the day.

Additional reporting by Karen Brettell in New York; Editing by Bernadette Baum

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