NEW YORK (Reuters) - A gauge of global equity markets edged lower on Thursday amid investor worries over U.S. government funding, but the U.S. dollar rebounded after recent weakness as central bankers convened for an annual policy summit at Jackson Hole, Wyoming.
Yields on U.S. Treasury debt rose in light trading as investors awaited speeches scheduled for Friday by Federal Reserve Chair Janet Yellen and European Central Bank President Mario Draghi.
The annual central bankers’ retreat coincides with fresh indications of global growth, with copper rising to a near three-year high on signs of stronger demand in top consumer China as inventories fell in London warehouses.
President Donald Trump’s inability to usher legislation through Congress, however, is worrisome, said Rick Meckler, president of hedge fund LibertyView Capital Management LLC in Jersey City, New Jersey.
“Investors are reluctant to get too far out on their skis in terms of buying stocks,” Meckler said. “Rallies are not extending the way they had when people had more confidence that the Trump agenda, particularly tax cuts, would be passed.”
In a post on Twitter, Trump said Congress could have avoided a legislative “mess” if it had heeded his advice on raising the amount of money the government can borrow, known as the debt ceiling.
A late-September deadline looms for U.S. officials to raise the debt ceiling or risk default, leading investors to anticipate a volatile month, said Michael Purves, chief global strategist and head of equity derivatives research at Weeden & Co in Greenwich, Connecticut.
“Why would you rush to buy this dip with the debt ceiling looming?” Purves said.
MSCI's broad index of world stock markets .MIWD00000PUS see-sawed for most of the session, ending 0.06 percent lower. In Europe, but the FTSEurofirst 300 index .FTEU3 of leading regional shares closed 0.22 percent higher.
The Dow Jones Industrial Average .DJI closed down 28.69 points, or 0.13 percent, to 21,783.4. The S&P 500 .SPX lost 5.07 points, or 0.21 percent, to 2,438.97 and the Nasdaq Composite .IXIC dropped 7.08 points, or 0.11 percent, to 6,271.33.
Developing markets bucked the trend. MSCI’s emerging markets index .MSCIEF rose 0.62 percent.
The dollar rebounded, helped by fewer-than-expected U.S. initial jobless claims, which rose 2,000 to a seasonally adjusted 234,000 for the week ended Aug 19.
The greenback is down 14 percent against the euro this year, driven by dashed expectations for tax cuts and other pro-growth plans by the Trump administration, which has eroded the case for further pro-dollar rises in U.S. interest rates.
The dollar index .DXY gained 0.16 percent, with the euro EUR= falling 0.05 percent to $1.1799 while the Japanese yen weakened 0.50 percent versus the greenback at 109.58 per dollar.
Crude oil fell on demand concerns as U.S. Gulf Coast refineries shut operations on expectations Tropical Storm Harvey will turn into a major hurricane when it makes landfall on the Texas coast Friday night or early Saturday..
U.S. crude futures CLc1 shed 98 cents to settle at $47.43 a barrel and Brent crude LCOc1 fell 53 cents a barrel to settle at $52.04.
German bond yields were pinned near eight-week lows. Demand for the country’s top-rated debt was supported by expectations for a cautious message from the Jackson Hole summit, as well as Trump’s threat on Tuesday to shut down the U.S. government if Congress failed to secure funding for his long-promised wall along the U.S. border with Mexico.
German 10-year bond yields were a tad higher at 0.38 percent DE10YT=TWEB, having briefly touched an eight-week low of 0.37 percent.
Benchmark 10-year notes US10YT=RR last fell 6/32 in price to yield 2.1939 percent.
Spot gold XAU= was down 0.21 percent at $1,286.98 an ounce.
Benchmark copper CMCU3 on the London Metal Exchange closed 1.9 percent higher at $6,688 per tonne, having earlier touched $6,731.50, its highest since November 2014.
Additional reporting by Sinead Carew, editing by Nick Zieminski and Dan Grebler