By Greg Peel

The Dow fell 113 points or 0.7% while the S&P lost 0.5% to 1685 and the Nasdaq dropped 0.4%.

Commonwealth Bank ((CBA)) delivered a cracker of a result yesterday but failed to deliver a special dividend. Bridge Street sulked for most of the day, and weak earnings reports from other majors provided an air of despondence on what was a very big jump in trading volumes compared to the recent trend. But the index fought back to a flat close nevertheless, buoyed on the death by news coming in from Europe that France had lifted itself out of recession, posting a positive GDP result alongside Germany.

The aggregate eurozone economy expanded by 0.3% in the June quarter to mark the best result since the March quarter of 2011. Germany's economy grew by 0.7%, France pleased with a 0.5% gain, and Portugal surprised with 1.1%. The economies of Italy, Spain and the Netherlands continued to contract, and while June's quarter on quarter eurozone performance was positive, year on year the aggregate economy contracted by 0.7%.

The results beat consensus forecasts of 0.2% qoq and minus 0.8% yoy, and provided a little ray of hope for Europe despite a lingering 12% unemployment rate. But the numbers weren't overly surprising given recent positive data out of Europe, particularly the now expanding PMIs. Hence the reaction in European stock markets, which have already been buoyant, was not overwhelming. Germany's DAX rose 0.3% and France's CAC rose 0.5%.

Nor was Wall Street inspired, with the spectre of reduced Fed stimulus hanging over the stock market. The US July producer price index was released last night, and at 1.2% annual core growth fell short of 1.4% expectations. St Louis Fed president James Bullard expressed his concern over persistent weak inflation which is failing to push towards the Fed's 2.0% target. Indeed, recent Fedspeak may have all but confirmed that tapering will begin soon, likely before year-end, but it's hard to conclude from the rhetoric that it will begin as early as September.

Yet with the benchmark US ten-year bond yield back up at 2.7%, and with a market expecting a more normal 3% not to be too far off, stocks have become less attractive. Again we have the argument: is tapering a positive sign that the US economy is growing, or will reduced stimulus affect a big sell-off in stocks? The latter camp seems to be winning at the moment, although low volumes are contributing and many an observer has commented that Wall Street often drifts in August.

LME traders were more inspired by the eurozone GDP, although once again volumes are minimal. All metals posted gains of less than 1% except lead which rose 1.5%. A greater than expected reduction in US weekly inventories saw the oils tick higher again, with Brent up US38c to US$110.20/bbl and West Texas up US12c to US$106.95/bbl.

Spot iron ore rose another US$1.00 to US$142.80/t.

The US dollar index is a tick lower at 81.73 and the Aussie is 0.2% higher at US$0.9130.

The SPI Overnight fell 11 points or 0.2%.

It will be a busy night for US data tonight, with the CPI, industrial production and housing market sentiment all due along with both the Empire State and Philly Fed manufacturing indices.

In Australia the focus is firmly on the results season, and there are plenty more results today. Yesterday I incorrectly suggested Wesfarmers ((WES)) was reporting, given one calendar had set that date. Another has the report today and yet another tomorrow. Best to err on the side of early rather than late, so I'll assume today.

We should also, perhaps, see results from AMP ((AMP)) and a host of smaller names. Please refer to the FNArena calendar.

Rudi will appear on Sky Business today at noon and again between 7-8pm on Switzer.