Stumbling stocks dent hopes of longest winning run in 14 years
NEW YORK (Reuters) – Broad equity market declines in Asia and Europe and a lower open on Wall Street threatened to spoil the longest winning streak for MSCI’s global stock index since 2003.
Japan’s Nikkei index saw a wild 2% swing after hitting its highest since 1992, and Europe’s main indexes were firmly in the red as tech and commodity stocks tumbled and as Brexit talks resumed amid low expectations in Brussels.
Germany’s 10-year bond yield edged up for the first time in more than a week, and the euro and pound were both higher, as the long-running saga of US tax reform weighed on the dollar.
In the US, technology stocks dragged down indexes amid skepticism over a Republican tax overhaul plan.
In late-morning trading, the Dow Jones Industrial Average fell 77.61 points, or 0.33%, to 23,485.75, the S&P 500 lost 11.03 points, or 0.43%, to 2,583.35, and the Nasdaq Composite dropped 52.50 points, or 0.77%, to 6,736.62.
“The stock market has run out of a little momentum,” Societe Generale strategist Kit Juckes said. “We are waiting for some news from the Republicans on the [US] tax plans, there is a bond market that has stalled, and we’ve got rather soggy looking emerging markets... We probably need to get US Treasury yields higher to get things going again.”
MSCI’s all-country equity index is clocking year-to-date gains of almost 19%.
But as a measure of relative calm amid the current bull market and a reflection of the low-volatility environment that has dominated all year, none of the most recent 10 daily gains has exceeded half a percent, and more than half of them were less than 0.1%.
The dollar index, which tracks the greenback versus a basket of six key currencies, fell 0.202 point, or 0.21%, to 94.664.
A US Senate tax-cut bill, differing from one already in the House of Representatives, was expected to be unveiled on Thursday, complicating a Republican tax overhaul and increasing skepticism on Wall Street about the effort.
“There’s very much a risk of disappointment,” said Steven Dooley, a currency strategist for Western Union Business Solutions in Melbourne. “The US dollar could go through a weakening phase on the back of uncertainty around that tax reform.”
The euro was last up 0.29% to $1.1627, while Europe’s broad FTSEurofirst 300 index dropped 1.06% to 1,535.4.
Oil prices steadied just below twoyear highs, supported by supply cuts by major exporters. But analysts said the market could be vulnerable to a sell-off after several months of gains. US crude rose 0.74% to $57.23 per barrel, and Brent was last at $63.77, up 0.44% on the day.
Spot gold added 0.3% to $1,284.30 an ounce. US gold futures gained 0.11% to $1,285.10 an ounce.
Cryptocurrency bitcoin skidded about 3%, but not before dipping almost 5%. It had hit a record high just shy of $8,000 on Wednesday after a coalition of developers and investors suspended a software upgrade planned for next Thursday that could have split the digital currency in two.
WOMEN COMMUNICATE with the humanoid robot Pepper during Riga Comm 2017, a business technology and innovation fair in Riga, Latvia, yesterday.