U.S. Stocks Buck Global Selloff as Dollar Advances: Markets Wrap

Updated on
  • Emerging-market equities sink to the lowest in two months
  • Oil tumbles as data show expanding gasoline inventories
Will Hobbs of Barclays Wealth says the pullback is a “function of healthy markets.”

U.S. stocks put the brakes on a global equity selloff as technology shares advanced. Oil tumbled the most in two months, while the dollar strengthened amid a broad risk-off mood.

Gains in tech shares fought slumps in consumer and financial firms to a virtual draw, leaving the S&P 500 down less than a point. However small, it was the fourth loss in a row, the longest slump since March. European stocks almost erased losses following the Nikkei’s worst rout in nine months. Treasuries rose as investors’ focus turned to efforts to avert a U.S. government shutdown Saturday. Developing-nation stocks sank to a two-month low.

Global markets have succumbed to a bout of profit taking this week, while U.S. equities struggled to maintain gains, as traders move out of some of 2017’s biggest winners, including technology shares and emerging-market stocks. The pause in the rally comes as investors assess U.S. tax reform developments and wrangling over spending after a Republican plan to avoid a federal shutdown Saturday was thrown into disarray by infighting.

Investors are “locking in profits earlier than usual for the year and not opening any new positions,” said Andrew Clarke, director of trading at Mirabaud (Asia) Ltd. “Eventually, as profit taking subsides, buying for the new year will appear as people look toward 2018.”

Stephen Parker of JPMorgan Private Bank and Chris Watling of Longview Economics discuss the market outlook.

Bloomberg

Elsewhere, sterling weakened as efforts to rescue Brexit talks appeared to stumble. Australia’s dollar dropped as slower-than-expected growth spurred traders to dial back their forecasts on interest-rate increases.

Terminal customers can read more in our Markets Live blog.

Here are some of the key events facing markets in the coming days:

  • The European Commission College of Commissioners discusses Brexit on Wednesday and will likely make its recommendation on whether sufficient progress has been made to move negotiations onto the future relationship.
  • The U.S. faces a partial government shutdown after money runs out on Dec. 8 if Congress can’t agree on a spending bill by then.
  • U.S. employers probably hired at a robust pace in November as the unemployment rate held at an almost 17-year low. The Labor Department’s jobs report Friday may also show a bump up in average hourly earnings.
  • Brazil’s central bank is set to cut its key rate to record of 7 percent Wednesday.

These are the main moves in markets:

Stocks

  • The S&P 500 was little changed as of the close of trading in New York.
  • Dow Jones Industrial Average fell 0.2 percent as Nasdaq Composite gained 0.2 percent.
  • The Stoxx Europe 600 Index fell 0.1 percent.
  • The U.K.’s FTSE 100 Index gained 0.3 percent.
  • Japan’s Nikkei 225 Stock Average decreased 2 percent to a three-week low.
  • The MSCI Asia Pacific Index sank 1.3 percent to the lowest in almost six weeks.
  • The MSCI Emerging Market Index dipped 1.5 percent.

Currencies

  • The Bloomberg Dollar Spot Index gained 0.3 percent.
  • The euro declined 0.2 percent to $1.1799.
  • The British pound decreased 0.4 percent to $1.3389.
  • The Japanese yen rose 0.4 percent to 112.19 per dollar.

Bonds

  • The yield on 10-year Treasuries decreased two basis points to 2.33 percent.
  • Germany’s 10-year yield declined two basis points to 0.29 percent.
  • Britain’s 10-year yield decreased three basis points to 1.23 percent.

Commodities

  • West Texas Intermediate crude fell 2.9 percent to $55.93 a barrel.
  • Gold fell 0.1 percent to $1,264.78 an ounce.
  • Copper gained 0.6 percent to $2.9645 a pound.

— With assistance by Natasha Doff, Adam Haigh, Cormac Mullen, Samuel Potter, Brian Chappatta, and David Wilson

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