Global Markets: Dow, S&P 500 down as dollar rises, yield curve flattens

By Sinéad Carew NEW YORK (Reuters) - U.S. stocks were slightly lower in choppy trade on Monday as some investors showed earnings season nerves and the dollar strengthened, while long-dated U.S. Treasury prices edged higher.

Reuters October 23, 2018 02:05:15 IST
Global Markets: Dow, S&P 500 down as dollar rises, yield curve flattens

Global Markets Dow SP 500 down as dollar rises yield curve flattens

By Sinéad Carew

NEW YORK (Reuters) - U.S. stocks were slightly lower in choppy trade on Monday as some investors showed earnings season nerves and the dollar strengthened, while long-dated U.S. Treasury prices edged higher.

The U.S. dollar rose as the British pound fell on news that Brexit negotiations with the European Union over Northern Ireland remained in flux and as the euro continued its slide on political uncertainty over Italy's budget.

Falling stocks boosted demand for low-risk debt, though gains were limited as investors remained on edge with rising inflation pressures and further potential interest rate hikes by the Federal Reserve.

The third-quarter earnings season and U.S. midterm elections also weighed on investor enthusiasm, along with the rising dollar, according to money managers.

"People are looking at the negatives and saying that it's a situation where there are more headwinds. At least until the midterms, it's going to be difficult to make any significant progress on the upside. The drift will be lower," said Alan Lancz, president, Alan B. Lancz & Associates Inc., an investment advisory firm in Toledo, Ohio.

The Dow Jones Industrial Average fell 65.74 points, or 0.26 percent, to 25,378.6, the S&P 500 lost 5.67 points, or 0.20 percent, to 2,762.11 and the Nasdaq Composite added 42.44 points, or 0.57 percent, to 7,491.46.

U.S. EARNINGS

Investors looked ahead to the peak week for the U.S. earnings season, with Amazon, Alphabet, Microsoft and Caterpillar among the companies reporting.

Helped by a strong economy and deep corporate tax cuts, S&P 500 earnings per share are expected to grow 22 percent in the third quarter, according to I/B/E/S data from Refinitiv.

"There's some nervousness ahead of that," said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

The dollar index rose 0.3 percent, with the euro down 0.41 percent to $1.1466. [USD/]

Sterling , meanwhile, slipped 0.8 percent against the dollar. British Prime Minister Theresa May said the majority of Britain's deal to exit the EU has been agreed upon but repeated her opposition to an EU proposal regarding the Irish border, according to excerpts from her statement to Parliament.

Benchmark 10-year U.S. Treasury notes last rose 3/32 in price to yield 3.1902 percent, from 3.202 percent late on Friday.

Brazilian stocks were the biggest gainers in Latin America, with emerging market sentiment boosted as China promised to provide stimulus to stabilise its economy and offset the impact of U.S. tariffs.

Oil trading was choppy, with U.S. crude futures settling at $69.17 per barrel, up 5 cents, or 0.07 percent. Brent settled at $79.83 per barrel, up 5 cents, or 0.06 percent. [O/R]

Spot gold dropped 0.3 percent to $1,221.97 an ounce.

After rising as much as 0.7 percent earlier in the day, European stocks ended lower as relief over Moody's decision to keep Italy's sovereign rating outlook stable was short-lived and the focus turned to Europe's response to Rome's budget plans. [.EU]

Asian stocks rose after China promised to stabilise its economy and offset the impact of U.S. tariffs.

In China, Shanghai blue chips gained 4.3 percent in their biggest one-day gain since November 2015, after Beijing promised stimulus support for stock markets in the world's second-largest economy.[L3N1X21FI]

Graphic - Asia-Pacific valuations: https://tmsnrt.rs/2Dr2BQA

Graphic - MSCI, Shanghai Indexes: https://tmsnrt.rs/2OGOOuu

(Additional reporting by Caroline Valetkevitch, April Joyner, Kate Duguid, Karen Brettell in New York, Karin Strohecker, Tom Wilson, Abhinav Ramnarayan in London and Wayne Cole in Sydney; Editing by Paul Simao and Dan Grebler)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.