* Global stock index steady, heads for weekly loss
* U.S. dollar, Treasury yields dip after dismal data
* China bank system worries, Trump fears constrain equities
* European, emerging market stocks outperform U.S.
By Dion Rabouin
NEW YORK, May 12 World stock markets paused near
record highs on Friday after underwhelming U.S. retail sales
data and worries over China's banking system spurred investors
to lock in recent profits and pushed U.S. Treasury yields and
the dollar lower.
U.S. stocks dipped and were on track to book losses for the
week as weak economic data weighed on financial shares. European
equities and emerging markets bourses edged higher to balance
the global equity ledger.
MSCI's gauge of world stock markets was
little changed from its late Thursday close, on track for its
first weekly loss in four.
Stocks have been hamstrung by signs of weak consumer
spending and waning enthusiasm over a recovery in European
Concern over risky assets has dominated trading in recent
days and sent investors to assets like gold and the Japanese yen
after President Donald Trump unexpectedly fired his FBI chief,
the potential fallout of which could delay any positive reaction
to Trump's proposed pro-growth trade and tax policies.
The benchmark S&P 500 stock index and the Dow edged lower as
financial stocks fell, but losses on the Nasdaq were kept in
check by a rise in technology shares.
"Today, the focus is on macro news, while the political
situation in Washington continues to linger. So we are looking
at a cautious market," said Peter Cardillo, chief market
economist at First Standard Financial in New York.
The Dow Jones Industrial Average fell 40.97 points,
or 0.2 percent, to 20,878.45, the S&P 500 lost 5.91
points, or 0.25 percent, to 2,388.53 and the Nasdaq Composite
added 2.31 points, or 0.04 percent, to 6,118.27.
China's banking regulator this week launched emergency risk
assessments of lenders' new business practices, sources told
Reuters, as Beijing extended a crackdown on shadow banking.
The dollar index, which tracks the currency against a basket
of six major rivals, fell 0.35 percent to 99.228.
The dollar's losses tracked a decline in U.S. Treasury
yields as increases in domestic retail sales and consumer prices
in April fell short of analysts' forecasts, raising doubts about
the economy's rebound in the second quarter.
“It's building on a theme of the last several months which
is the actual inflation prints on the core are very
non-threatening,” said Richard Franulovich, senior currency
strategist at Westpac Banking Corp in New York. He was referring
to the core CPI’s increase of 1.9 percent year-on-year in April,
the smallest gain since October 2015.
“The Fed is still going to be hiking probably two more times
this year, but the urgency to act and deliver a hawkish thrust
to their actions is not there.”
The yield on benchmark 10-year Treasury notes
was down about 7 basis points at 2.33 percent, while the 30-year
yield was 5 basis points lower at 2.99 percent.
In Europe, stock markets steadied this week. Their
outperformance this year against global peers remains intact,
with the benchmark's 10 percent gains outpacing the 7
percent rise on the S&P 500.
Emerging markets bourses continued their outperformance as
well, with MSCI's emerging markets index rising 0.2
percent to a fresh two-year high. The gauge has posted
year-to-date gains of more than 15 percent.
Oil prices were little changed, on pace for their biggest
gain in five weeks as traders expected OPEC-led production cuts
to extend beyond the middle of this year and as U.S. crude
inventories fell to their lowest levels since February.
International Brent crude futures stood at $50.74
per barrel. U.S. West Texas Intermediate crude futures
were at $47.76 per barrel.
Gold rose 0.3 percent to $1227 an ounce. Copper
gained 0.45 percent after hitting a one-week high in the
previous session with investors encouraged by top copper
consumer China's easing of monetary policy to stimulate growth.
(Reporting by Dion Rabouin; Additional reporting by Vikram
Subhedar in London, Yashaswini Swamynathan in Bengaluru, Sam
Forgione in New York; Editing by Bernadette Baum)