(Reuters)
(Reuters)

US stocks mixed; Treasuries, dollar decline

  • The S&P 500 Index fell 0.1%
  •  The MSCI All-Country World Index increased 0.5% to the highest in 19 weeks

US stocks were mixed in thin trading, while Treasuries and the dollar fell as investors awaited hints on the direction of interest rates from the Federal Reserve and any clarity on trade.

The S&P 500 struggled for footing ahead of the release of the Fed’s meeting minutes Wednesday afternoon that will give a peak into the thinking behind the central bank’s big decision last month to pause rate hikes. CVS Health Corp. plunged after the company said its results would be dragged down by rising costs and its recent takeover, weighing on health-care shares.

The 10-year Treasury yield rose above 2.64%, while the dollar fell against major currencies as American and Chinese officials work in Washington this week to resolve a trade war that’s set to ramp up on 1 March. West Texas crude oil pushed above $56 a barrel.

“It seems like a lot of this rally, which has been rather spectacular, has a lot of FOMO in it, meaning fear of missing out," Dave Haviland, managing partner of Beaumont Capital Management in Needham, Massachusetts, said by phone. “But we still have to look at, yes the markets are doing great, but what are the economic fundamentals?"

The post-Christmas rally that’s added 18% to US stocks appears to have run out of catalysts to propel it higher. Technical indicators, from closely watched moving averages to the relative-strength index, signal that gains from here may be difficult to come by. Investor focus will be trained on headlines out of this week’s negotiations in Washington and on any information coming out of the Fed that could shed more light on future monetary policy.

Elsewhere, the pound was steady as Prime Minister Theresa May headed back to Brussels in a last-ditch attempt to save her Brexit deal. Gold traded at the highest since May and palladium soared to a record as a shortage started to bite. Emerging-market shares rallied and their currencies advanced. South Africa’s rand fell as the government unveiled a bailout package for utility Eskom.

In Asia, equities in South Korea and Hong Kong set the pace for gains across most of the region. The Japanese yen dropped, giving shares a boost, after the nation’s trade deficit came in wider than expected.

These are the main moves in markets:

Stocks

The S&P 500 Index fell 0.1% as of 12:31pm New York time. The Stoxx Europe 600 Index gained 0.7% to the highest in 19 weeks. The MSCI All-Country World Index increased 0.5% to the highest in 19 weeks. The MSCI Emerging Market Index surged 1.5%.

Currencies

The Bloomberg Dollar Spot Index fell 0.1%. The euro was rose 0.1% $1.1355. The Japanese yen fell 0.1% to 110.74 per dollar, the weakest in a week. The MSCI Emerging Markets Currency Index jumped 0.5% to the highest in two weeks.

Bonds

The yield on 10-year Treasuries climbed two basis points to 2.65%. Germany’s 10-year yield declined one basis point to 0.095%. Britain’s 10-year yield was steady at 1.168%.

Commodities

The Bloomberg Commodity Index rose 0.4%. West Texas Intermediate crude gained 1.5% to $56.95 a barrel, the first retreat in more than a week. LME copper gained 0.3% to $6,335.50 per metric ton, reaching the highest in more than 21 weeks on its sixth consecutive advance. Gold increased 0.1% to $1,346.60 an ounce, hitting the highest in 10 months.

Close