January 24, 2019 / 7:50 PM / 6 months ago

GLOBAL MARKETS-Stocks meander, bonds up after ECB, U.S.-China trade talk

    * S&P 500, Dow edge lower; Nasdaq up
    * U.S. political uncertainty, global growth worries linger
    * Euro weakens against dollar after ECB commentary
    * Oil steady, U.S. Treasury yields hit one-week low

 (Updates to late afternoon, adds commentary)
    By Sinéad Carew
    NEW YORK, Jan 24 (Reuters) - Stocks flitted between positive
and negative territory on Thursday while U.S. Treasuries were in
demand after the European Central Bank chief said economic
growth was likely to be weaker than previously expected and the
United States was cautious on prospects for a trade deal with
China.
    Demand increased for safe-haven assets with U.S. Treasury
10-year yields hitting a one-week low, due to anxiety about
slowing global growth and trade after U.S. Commerce Secretary
Wilbur Ross told CNBC that Washington was "miles and miles" from
resolving trade issues with China.      
                         
    The euro touched its lowest point against the dollar in six
weeks after ECB President Mario Draghi left the bloc's interest
rates unchanged on Thursday, saying near-term data is likely to
be weaker than previously anticipated due to the fallout from
factors ranging from China's slowdown to Brexit.             
            
    "It's not just an European issue. We are talking about a
global slowdown," said Stan Shipley, a strategist at Evercore
ISI in New York.
    On top of the U.S.-China trade war and its global impact
investors were also worried about the economic impact of the
longest U.S. government shutdown in history, now in its 34th
day. 
    Thursday's data showed the number of applications for U.S.
unemployment benefits fell to more than a 49-year low last week 
though claims for several states including California were
estimated.             
    But while the data was encouraging, Tony Roth, chief
investment officer at Wilmington Trust in Delaware said it was
only a matter of time before a continued shutdown would do
"irreparable damage" to the economy. The shutdown and U.S.-China
trade war are adding pressure to global economies, he said.
    "Every day that goes by that we don't have positive news on
those fronts, the starting base line (for the market) is
negative," said Roth. "It's a major tactical blunder that the
(Trump) administration is trying to do both at the same time."
    The Dow Jones Industrial Average        fell 77.85 points,
or 0.32 percent, to 24,497.77, the S&P 500        lost 3.59
points, or 0.14 percent, to 2,635.11 and the Nasdaq Composite
        added 27.08 points, or 0.39 percent, to 7,052.85.
    On Wall Street Nasdaq was supported by strength in chipmaker
and airline stocks after earnings reports.              
    The pan-European STOXX 600 index          rose 0.22 percent
and MSCI's gauge of stocks across the globe                 shed
0.04 percent.
    The euro was 0.78 percent lower against the dollar at
$1.1291, its lowest since Dec. 14, and on pace for the
second-worst day this year.
    More broadly, the dollar index, which tracks the greenback
versus the euro, yen, sterling and three other currencies,
       was up 0.56 percent at 96.658.
    Benchmark 10-year notes             last rose 12/32 in price
to yield 2.7121 percent, from 2.755 percent late on Wednesday.
    Oil prices were supported by the U.S. threat of sanctions on
OPEC member Venezuela but limited by U.S. data showing record
high gasoline inventories and an unexpected big build in crude.
            
    Brent crude         futures fell 2 cents to $61.12 a barrel
by 2:23 p.m. EST (1923 GMT). U.S. West Texas Intermediate (WTI)
crude        futures rose 56 cents to $53.18 a barrel.      

    
 (Additional reporting by Richard Leong, Saqib Iqbal Ahmed and
Stephanie Kelly in New York, Marc Jones and Abhinav Ramnarayan
in London; editing by G Crosse and Chizu Nomiyama)
  
 
 
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