By Sinead Carew NEW YORK (Reuters) – World stocks were down for the fourth day in a row on Tuesday, while strong economic growth in Germany boosted the euro to an almost three-week high. Wall Street was lower on weak oil prices, uncertainty about U.S. tax policy and the economy’s ability to deal with more […]
Stocks, oil prices decline; German growth lifts euro
By Sinead Carew
NEW YORK (Reuters) – World stocks were down for the fourth day in a row on Tuesday, while strong economic growth in Germany boosted the euro to an almost three-week high.
Wall Street was lower on weak oil prices, uncertainty about U.S. tax policy and the economy’s ability to deal with more interest rate hikes. European stocks fell to a two-month low.
U.S. Treasury two-year note yields climbed to a nine-year peak while long-dated debt yields fell, flattening the yield curve flattened for a second straight day, while investors braced for a Federal Reserve December rate hike.
In Germany a 0.8-percent third-quarter growth reading beat forecasts and showed the economy expanding at annualized rates of more than 3 percent.
“It’s been a euro trade today, and it’s stronger against just about everything,” Brad Bechtel, managing director FX at Jefferies in New York, said. “The numbers out of Germany were pretty good last night.”
The dollar index <.DXY> fell 0.74 percent, with the euro <EUR=> up 1.13 percent to $1.1797.
On Wall Street, investors sought updates on rival U.S. House of Representatives and Senate tax reform proposals. Republican U.S. Senator Rand Paul said he would seek to add a provision to repeal Obamacare’s requirement Americans obtain health insurance and scale back its elimination of a federal deduction for state and local taxes.
“As proposed, both plans, but especially the House package, would be good for corporate America. There’s uncertainty whether anything is going to be passed or how much compromise is going to occur,” said J. Bryant Evans, portfolio manager at Cozad Asset Management, in Champaign, Illinois.
After an upcoming break for the Nov. 23 U.S. Thanksgiving holiday, there are only 12 legislative days before year-end.
The Dow Jones Industrial Average <.DJI> fell 57.08 points, or 0.24 percent, to 23,382.62, the S&P 500 <.SPX> lost 9.3 points, or 0.36 percent, to 2,575.54 and the Nasdaq Composite <.IXIC> dropped 35.68 points, or 0.53 percent, to 6,721.92.
The pan-European FTSEurofirst 300 index <.FTEU3> lost 0.69 percent and MSCI’s gauge of stocks across the globe <.MIWD00000PUS> shed 0.17 percent.
Monetary policy was also on traders’ minds with the heads of the U.S., European, British and Japanese central banks attending a European Central Bank conference in Frankfurt.
The U.S. two-year yield <US2YT=RR> hit a nine-year peak just shy of 1.7 percent, up from Monday’s 1.687 percent.
Benchmark 10-year notes <US10YT=RR> last rose 6/32 in price to yield 2.3788 percent, from 2.4 percent late on Monday.
Stocks in Asia had fallen after China’s retail sales and industrial output data missed market expectations.
MSCI’s broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> dipped 0.4 percent in its third consecutive day of losses. Japan’s Nikkei <.N225> was unchanged after four sessions of losses.
Oil declined for a third day as evidence of rising U.S. output and a gloomier outlook for demand growth in a report from the International Energy Agency (IEA) weighed on prices.
U.S. crude <CLcv1> fell 1.97 percent to $55.64 per barrel and Brent <LCOcv1> was last at $62.07, down 1.73 percent on the day.
(For a graphic on ‘MSCI and Nikkei chart’ click http://reut.rs/2sSBRiD)
(For a graphic on ‘World FX rates in 2017’ click http://tmsnrt.rs/2egbfVh)
(For a graphic on ‘Global assets in 2017’ click http://tmsnrt.rs/2yaWht3)
(For a graphic on ‘Global market cap’ click http://reut.rs/2mcp7T1)
(For a graphic on ‘Emerging markets in 2017’ click http://tmsnrt.rs/2ihRugV)
(Additional reporting by Saqib Iqbal Ahmed and Gertrude Chavez-Dreyfuss in New York, Sruthi Shankar in Bengaluru, Marc Jones in London, Wayne Cole in Sydney; Editing by Mark Heinrich and Nick Zieminski)