U.S. stocks fell after benchmark indexes neared all-time highs. Developing-market equities capped their longest rally in 10 years as a surprise drop in Chinese exports fueled speculation of more stimulus. The dollar advanced.
The Standard & Poor’s 500 Index slipped 0.5 percent by 4 p.m. in New York, after three days of gains, while the Nasdaq Composite Index fell 0.2 percent after briefly topping 5,000 points. The MSCI Emerging Markets Index added 0.7 percent, rising an 11th straight day. The Bloomberg Dollar Spot Index rose 0.3 percent, while weak Chinese export data sent currencies of commodity-producing nations lower. European stocks extended their record, while U.S. oil increased for a third day.
The S&P 500 and Nasdaq Composite rose to within 0.7 percent of records before retreating from those levels as investors awaited earnings this week from JPMorgan Chase & Co. and Johnson & Johnson to Intel Corp. The fortunes of the U.S. and Chinese economies look to be diverging, with the Federal Reserve considering raising key interest rates, while China’s state media has called for additional monetary stimulus.
“There’s a lack of economic numbers today, so investors are gearing up for earnings season,” Stephen Carl, principal and head equity trader at Williams Capital Group LP in New York, said in a phone interview. “It remains to be seen if good economic numbers and positive earnings reports will fuel things in a positive vein over the short-term.”
General Electric Co. slumped 3.1 percent to lead industrial shares lower. The company surged 11 percent Friday after announcing a stock buyback. Netflix added 4.4 percent to pace gains among Internet shares.
The S&P 500 and Nasdaq stalled short of their records last month amid concern corporate earnings will be eroded by the strong dollar and lower oil prices at the same time as the Fed looks to raise borrowing costs for the first time since 2006. Profits at U.S. companies are forecast to fall 5.6 percent in the first quarter.
At the same time, recent economic data has missed projections by the most in six years, boosting concern about earnings while bolstering the case for keeping U.S. rates lower for longer. Reports on retail sales and industrial production in March are due this week, along with housing starts. Fed officials next meet April 28-29 to discuss monetary policy.
“Investors are perhaps looking for something better than expected in earnings, which would certainly help the market,” Bruce Bittles, chief investment strategist at Milwaukee-based Robert W. Baird & Co., which oversees $110 billion, said by phone. “Weak earnings have been a top subject matter for months. There’s been a pervasive lack of bears, so there’s not much selling going on.”
The Stoxx Europe 600 Index added 0.2 percent to extend its all-time high to 413.63 after the gauge jumped the most since January last week. European economic data has been beating forecasts by the most in two years and a push by the European Central Bank to stimulate growth has helped the index rise 21 percent this year.
MSCI’s emerging-markets gauge last rose for 11 days in a row in January 2005. The Hang Seng China Enterprises Index of mainland Chinese companies listed in Hong Kong rallied for an eighth day Monday, jumping 4.3 percent to its highest close since May 2008 amid demand from mainland investors.
China is this week forecast to report the slowest economic growth since the global recession.
“Chinese data overnight is getting expectations of additional stimulus ramped up,” said Ioan Smith, managing director at trading firm KCG Europe Ltd. in London. In Europe, “the market is undecided after a very good run and right now there’s no clear catalyst to push the market any further,” he said.
The Shanghai Composite Index climbed 2.2 percent to a seven-year high. The Shanghai gauge has gained 74 percent in the past six months and trades at 15.7 times estimated earnings, according to data compiled by Bloomberg. The compares with a price-earnings multiple of around 10 for the Enterprises index.
“The trade figures aren’t good but that’ll lead to market expectations of more stimulus,” said Wu Kan, a money manager at Dragon Life Insurance Co. in Shanghai, which oversees about $3.3 billion.
The yuan and commodity currencies fell, with Australia’s dollar sliding 1.2 percent to 75.91 U.S. cents, approaching the 75.33 level reached April 2 that was its weakest since May 2009. New Zealand’s dollar and South Africa’s rand also dropped more than 1 percent.
Russia’s Micex Index climbed 1.3 percent on Monday as the ruble gained 2.9 percent, rebounding from a 3.4 percent slide on Friday. India’s S&P BSE Sensex Index and South Korea’s Kospi both added at least 0.5 percent.
Oil advanced, extending gains after a four-week rally, as skepticism among U.S. lawmakers over a nuclear deal with Iran signaled that a recovery in crude exports from the OPEC producer may be delayed.
West Texas Intermediate crude climbed 0.5 percent to settle at $51.91 a barrel, after capping its longest run of weekly increases since February 2014 on Friday. Brent crude rose 6 cents to end the session at $57.93.
U.S. President Barack Obama is dispatching three cabinet members to brief lawmakers as a Senate committee prepares to take up a bill that will give Congress 60 days to review any final agreement with Iran.
Gold retreated 0.7 percent to settle at $1,198.66 as the dollar advanced and investors weighed the outlook for U.S. borrowing costs. The metal slid for the fourth time in five days. Yields on 10-year U.S. Treasuries fell two basis points, or 0.02 percentage point, to 1.93 percent.
Wheat futures for July delivery slid 4.5 percent to $5.0025 a bushel in Chicago, their biggest one-day drop since March 2013, amid reports the U.S. production belt will see scattered showers the next two weeks, easing dry conditions. Rains favoring growing conditions are also predicted for Ukraine and Russia.
The Bloomberg Commodity Index fell 0.4 percent, declining for the third time in four days.