Reuters logo
GLOBAL MARKETS-Trump rally pauses as stocks, dollar slip on profit-taking
December 21, 2016 / 7:52 PM / a year ago

GLOBAL MARKETS-Trump rally pauses as stocks, dollar slip on profit-taking

* Dollar index slips, euro regains $1.04

* Wall Street edges down, Dow still hanging below 20,000 mark

* Gains in Asia support global equity gauge

* Oil falls on surprise build in U.S. inventories (Updates to afternoon U.S. trading, adds quotes, data)

By Dion Rabouin

NEW YORK, Dec 21 (Reuters) - Stocks edged down and the dollar eased from 14-year highs on Wednesday, giving back some of the gains chalked up since Donald Trump’s U.S. election victory as investors took profits on the rally in risk assets over the past six weeks.

Wall Street was modestly lower with the Dow Jones industrial average remaining just below the 20,000 threshold.

“The 20,000 mark is just a number, but it’s also a nice chance to step back and plan for the coming year,” said Ryan Detrick, senior market strategist at LPL Financial in Charlotte, North Carolina.

U.S. stocks have surged since the election. The Dow Jones Industrial Average has jumped 9 percent and the S&P 500 has gained 6 percent since Nov. 8 with traders betting that President-elect Trump and a Republican-controlled Congress will embark on steep tax cuts and fiscal spending to stimulate the economy.

The Dow fell 16.2 points, or 0.08 percent, to 19,958.42, the S&P 500 lost 2.38 points, or 0.104811 percent, to 2,268.38 and the Nasdaq Composite dropped 4.76 points, or 0.09 percent, to 5,479.19.

The dollar index, which tracks the greenback against six currencies, fell 0.25 percent, retreating after hitting its highest level since December 2002 on Tuesday.

U.S. 10-year Treasury yields, which reached their highest in more than two years last week after the Federal Reserve raised interest rates and forecast more hikes in 2017 than most investors had expected, edged lower to 2.55 percent.

Benchmark 10-year yields have risen almost 80 basis points since early November.

Some traders likely reduced their dollar holdings on profit-taking ahead of a big batch of U.S. economic data on Thursday and the Christmas holiday, analysts said.

“There are no big fundamental underpinnings to the move. It’s more a technical adjustments ahead of the holidays,” said Paresh Upadhyaya, director of currency strategy at Pioneer Investments in Boston.

The euro, which touched a 14-year low on Tuesday, rose 0.4 percent to $1.0424 while the yen gained 0.25 percent to 117.55 per dollar.

The Swedish crown rose 1.4 percent, its biggest one-day gain in six months, to a two-month high of 9.6350 after the Riksbank only narrowly voted to add to its bond-buying program.

The pan-European STOXX 600 index fell 0.21 percent, having hit an 11-month high on Tuesday, led lower by banking shares.

Italy’s Monte dei Paschi di Siena, which must raise 5 billion euros by the end of the month to avoid state intervention, was once again in focus. Its shares dropped as much as 17 percent.

Chinese stocks rebounded as fears of a liquidity squeeze in the banking system subsided after risks from a bond scandal appeared contained, and on a pledge to deepen reforms in state-owned sectors.

The blue-chip CSI300 index rose 0.91 percent, to 3,339.54 points, while the Shanghai Composite Index gained 1.15 percent to 3,138.54 points, both snapping a two-session losing streak.

Tokyo’s Nikkei share average fell, pulling back from earlier one-year highs to close down 0.3 percent.

The gains in some Asian bourses counterbalanced losses in the U.S. and Europe to leave MSCI’s measure of global equity markets flat on the day.

Oil prices fell after the U.S. Energy Information Administration reported an unexpected crude inventory build and Libya’s National Oil Corporation said it planned to boost oil production by 270,000 barrels per day.

Brent crude fell 1.6 percent to $54.46 a barrel while U.S. WTI crude dropped 1.5 percent to $52.49.

Reporting by Dion Rabouin; Additional reporting by Karen Brettell in New York and Tanya Agrawal in Bengaluru; Editing by Meredith Mazzilli and Lisa Shumaker

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below