By Sinead Carew
| NEW YORK
NEW YORK U.S. stocks and the dollar fell while gold rose on Tuesday as investors looked for safety after President-elect Donald Trump said the U.S. currency was too strong, while sterling jumped as Prime Minister Theresa May said Britain would quit the European Union single market when the country leaves the EU.Wall Street was weighed down by the financial sector, and U.S. Treasury prices gained on concerns about Trump's planned protectionist trade policies.Ahead of his Jan. 20 inauguration, investors were beginning to question whether Trump would be able to follow through on pro-business pledges such as corporate tax cuts, infrastructure spending and lighter regulation.They are concerned Trump will pick a lot of different fights rather than focusing on seeing a few big issues to the end. "You're getting some give-back to the areas that have really done well with the Trump election," said Rick Meckler, president of investment firm LibertyView Capital Management in Jersey City, New Jersey. "There's a little less confidence that if you try to change everything that anything specific will change. It's causing people to question which of the things they've counted on will actually pass."
Investors fled the dollar after Trump said U.S. companies could not compete with China "because our currency is too strong. And it's killing us," in remarks published on the Wall Street Journal's website on Monday. The dollar was down 0.86 percent against a basket of major currencies .DXY, while the euro 1 percent to $1.07 EUR=.The pound, meanwhile, rose as high as $1.2416 GBP=D4. It was last up 2.96 percent, on track for the biggest daily increase sterling has seen since Reuters records began in 1998, after May said Britain would leave the EU's single market but would seek maximum access to it through a new trade agreement.The yen JPY= hit an almost seven-week high of 112.60 to the U.S. currency as investors sought shelter.
At 2:48 PM (1948 GMT), the Dow Jones Industrial Average .DJI was down 84.83 points, or 0.43 percent, to 19,800.9, the S&P 500 .SPX had lost 8.69 points, or 0.382038 percent, to 2,265.95 and the Nasdaq Composite .IXIC had dropped 38.13 points, or 0.68 percent, to 5,535.99.Benchmark 10-year U.S. Treasury notes US10YT=RR gained 14/32 in price to yield 2.33 percent, down from 2.38 percent late on Friday. The yields earlier fell to 2.305 percent, the lowest since Nov. 30.“We’re still in the midst of the weak-dollar, lower-yield trade,” said Jim Vogel, an interest rate strategist at FTN Financial in Memphis. "It seems to represent a reversal from last year, and renewed uncertainty about Brexit and U.S. fiscal policy and the need to stay in Treasuries to diversify."
Gold XAU= was up 1 percent at $1,215.5 an ounce and hit its highest since Nov. 22. It was on track for seven consecutive days of gains."The precious metal is clearly the beneficiary of this risk-off appetite and traders are building their hedge," said Naeem Aslam, chief market analyst at Think Markets UK Ltd.The FTSEurofirst 300 .FTEU3 index of major European stocks closed down 0.3 percent.Oil prices were mixed. Brent crude LCOc1, the international benchmark, traded down 0.7 percent at $55.49 a barrel, while U.S. crude CLc1 was up 0.2 percent at $52.48. (Additional reporting by Karen Brettell in New York, Nigel Stephenson and Patrick Graham in London, Shinichi Saoshiro in Tokyo and Nallur Sethuraman in Bengaluru; Editing by Dan Grebler and James Dalgleish)
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Updated Date: Jan 18, 2017 02:30 AM