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Markets

U.S. Stocks Slip as Dollar Advances for Fifth Day: Markets Wrap

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U.S. Stocks Slip as Dollar Advances for Fifth Day: Markets Wrap

  • S&P 500 Index stuck below 2,800; Target rallies on earnings
  • Treasuries mostly steady, along with gold, oil and the pound
We’re positive equities long-term, says Florent Brones, CIO at BNP Paribas Wealth Management.

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U.S. stocks edged lower as investors struggled to find inspiration after a torrid start to the year. The dollar rallied for a fifth day.

The S&P 500 Index fell 0.1 percent. Equities opened lower amid a lack of progress on the U.S.-China trade deal before briefly erasing losses on home-sales and service-industries data that beat estimates. General Electric Co. tumbled after its chief executive officer forecast negative industrial free cash flow this year. Target Corp. and Kohl’s Corp. buoyed consumer shares on the back of solid earnings.

“The market has priced in a lot of good news and I think now the fact that returns are moderating some is a reflection of now they need to see the follow-through,” Michael Arone, chief investment strategist at State Street Global Advisors, said in an interview at Bloomberg’s New York headquarters. “They need to see the specifics on that U.S.-China trade deal and they need more assurances that the Fed isn’t going to change track again.”

Dollar extends gain to a fifth day

Investors are hungry for concrete details about progress on a U.S.-China trade deal before they push a global equities rally further, leaving the S&P 500 Index seemingly stuck below the key 2,800 level. Trade and slowing growth are on the agenda as China’s most powerful officials gather in Beijing for the National People’s Congress, while investors will get the latest read on the U.S. economy with the monthly jobs report Friday.

Steven Major, HSBC’s head of fixed income, sees the U.S. 10-year yield stuck between 2.40% and 2.90%.

Source: Bloomberg

Elsewhere, European shares ended slightly higher, while equities in Japan, Korea and Australia slumped after China lowered its target for economic growth. Indian stocks recouped early losses made after the U.S moved to end key trade concessions for New Delhi.

Here are some key events coming up:

  • Australia’s central bank Governor Philip Lowe will give a speech on the housing market Wednesday.
  • Bank of Canada Governor is expected to keep rates on hold Wednesday due to lingering uncertainty on housing and investment, while sticking to his message that borrowing costs eventually need to head higher.
  • European Central Bank policy makers are expected to leave rates unchanged amid a deteriorating outlook. President Mario Draghi will hold a news conference on Thursday after the decision.
  • The U.S. jobs report Friday may show hiring moderated in February. Nonfarm payrolls may have increased by 185,000 while the jobless rate fell to 3.9 percent, according to estimates.

These are the latest moves in markets:

Stocks

  • The S&P 500 fell 0.1 percent as of the close in New York.
  • The Nasdaq 100 Index rose 0.1 percent.
  • The Stoxx Europe 600 Index rose 0.2 percent.
  • The MSCI Emerging Market Index climbed 0.2 percent.
  • The MSCI Asia Pacific Index sank 0.2 percent.

Currencies

  • The Bloomberg Dollar Spot Index increased 0.2 percent, its fifth straight advance.
  • The euro fell 0.3 percent to $1.1306, the weakest in more than two weeks.
  • The British pound was little changed at $1.3176.
  • The Japanese yen decreased 0.1 percent to 111.87 per dollar.

Bonds

  • The yield on 10-year Treasuries was little changed at 2.72 percent.
  • Germany’s 10-year yield climbed one basis point to 0.17 percent.
  • Britain’s 10-year yield rose less than one basis point to 1.28 percent.

Commodities

  • West Texas Intermediate crude was little changed at $56.61 a barrel.
  • Gold added 0.1 percent to $1,287.73 an ounce, reaching a six-week low.

— With assistance by Cormac Mullen, and Yakob Peterseil