U.S. Stocks Fall With Treasuries as Dollar Gains: Markets Wrap

(Bloomberg) -- U.S. stocks retreated in thin trading, with benchmark indexes hovering below all-time highs ahead of the holidays, while Treasuries slipped after a flurry of data bolstered optimism in the American economy.

The Dow Jones Industrial Average fell to 19,920 after climbing yesterday within 14 points of 20,000. The Bloomberg Dollar Spot Index resumed an advance, nearing the highest in more than a decade, while yields on 10-year government debt climbed to 2.55 percent. Gold slumped to $1,130 an ounce and crude prices settled a nickel short of $53 a barrel.

Data on durable goods orders showing increased business activity may reinforce bets that Donald Trump’s fiscal stimulus plans will stoke growth. Speculation the President-elect will open the spigot of spending has sent the dollar to near a 14-year high against the euro and pushed the Dow Jones Industrial Average to almost 20,000 this week.

“Going into next year, we are confident the dollar will continue to make headway. It will be the currency that appreciates in 2017, it’s just a question of how much,” said Andrew Milligan, head of global strategy at Standard Life Investments Ltd. in Edinburgh.

Read More: Markets live blog here. 

Stocks

• The S&P 500 Index declined for a second day, losing 0.2 percent to 2,260.97 at 4 p.m. in New York. Trading volume was 30 percent below the 30-day average at this time of day.
• The Dow fell 0.1 percent as its push to 20,000 has stalled. The blue-chip index on Thursday came within 14 points of the round-number milestone before pulling back.
• Billionaire investor Carl Icahn said he was concerned about the U.S. stock market “in the short term” given its run-up following Trump’s win, adding that he increased his hedging in recent weeks. 
• Many investors are likely waiting until January to sell stocks in anticipation of lower taxes on those gains in 2017, Icahn said on CNBC.
• Orders for U.S. business equipment advanced more than forecast last month, while the final reading of third-quarter gross domestic product topped estimates.
• The Stoxx Europe 600 Index lost 0.2 percent, retreating from the year’s highest intraday level on Wednesday. The basic resource industry was the biggest decliner, down 1.3 percent.

Bonds

• Treasuries fell, pushing the 10-year yield two basis points higher to 2.55 percent. The yield on two-year notes rose for the first time in five days.
• German bunds also declined, with the benchmark yield two basis points higher at 0.27 percent.
• U.S. mortgage rates rose, with the 30-year reaching the highest level since April 2014, after the Federal Reserve increased its benchmark lending rate.

Commodities

• West Texas Intermediate crude oil rose 0.9 percent to settle at $52.95 a barrel as Iraq signaled that it would adhere to the OPEC production targets. WTI dropped 1.5 percent Wednesday after data showed U.S. crude stockpiles expanded for the first time in five weeks.
• Lead, zinc and nickel dropped at least 2 percent as data showed China stepping up production.
• Gold traded near the lowest level in more than 10 months as exchange-traded funds holding the metal saw a 29th day of contraction. Bullion for future delivery dropped 0.3 percent to $1,130 an ounce.

--With assistance from Natasha Doff Cecile Gutscher and Beth Jinks To contact the reporter on this story: Jeremy Herron in New York at jherron8@bloomberg.net. To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Cecile Gutscher