U.S. Stock Rally Falters, Dollar Gains as Oil Dips: Markets Wrap

(Bloomberg) -- U.S. stocks stumbled after a six-day rally took them to all-time highs, while the dollar fluctuated with oil as investors assessed fresh data showing the U.S. economy on firm footing.

The S&P 500 Index fluctuated between gains and losses after its longest rally since February, with trading 25 percent below the 30-day average at this time of day. The dollar erased declines as a second reading on gross domestic product topped estimates. Crude headed for a weekly loss after OPEC’s move to prolong supply cuts for nine months disappointed investors hoping for more. The pound fell as a poll showed U.K. Prime Minister Theresa May losing ground to her main opponent ahead of next month’s election.

Action was subdued ahead of a three-day weekends in the U.S. and the U.K. A second straight month of stagnant orders for business equipment in April indicated investment in capital goods could slow in the second quarter, paring weekly gains in U.S. stocks. Crude languished below $50 a barrel, while U.K. investors awakened to election risk after a poll showed the Conservative party lead narrowed after the Manchester attack.

“Markets ultimately found the renewed deal among OPEC and friends underwhelming,” Cole Akeson, a strategist at Sberbank CIB in Moscow, wrote in an emailed note. “Essentially, the market consensus seems to have come around to a view that regardless of what effect on global inventories the deal may have for now, OPEC and its partners have little insight as to what to do later on.”

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Here are the main moves in markets:

Stocks

• The S&P 500 was virtually unchanged at 2,415 as of 2:23 p.m. in New York. The measure has climbed 1.4 percent in the week, the most since April 28.
• The Stoxx Europe 600 Index dropped 0.2 percent by 9:31 a.m. in New York, with oil and gas producers falling 1.3 percent. Automakers slid 0.8 percent.
• MSCI’s emerging-market index added 0.2 percent, pushing its gain in the five days to 2 percent.

Currencies 

• The Bloomberg Dollar Spot Index added 0.1 percent after falling as much as 0.2 percent. It’s up 0.1 percent on the week.
• The pound slid 1.2 percent to $1.2793. A YouGov poll for the Times late Thursday put the Conservatives at 43 percent with Labour at 38 percent -- a dramatic narrowing of the gap that even this month has been as high as 24 points in some polls.
• The yen rose 0.5 percent to 111.259 per dollar, after dropping 0.3 percent on Thursday.
• The euro fell 0.4 percent to $1.1166.

Commodities

• West Texas Intermediate crude rose 0.4 percent to $49.11, after sinking 4.8 percent in the previous session. Crude is down almost 4 percent this week, the most since the five days ending May 5.
• Gold futures rose 0.8 percent to $1,270.10 an ounce, heading for the highest since April.

Bonds

• The yield on 10-year Treasury notes fell two basis points to 2.24 percent. U.S. bonds are on course for a fourth month of gains.
• Benchmark German and French yields dropped three basis points.

Asia

• Japan’s Topix slipped 0.6 percent, trimming its weekly advance to 0.6 percent.
• Australia’s S&P/ASX 200 Index fell 0.7 percent, with BHP Billiton Ltd. dropping 2 percent. 
• South Korea’s Kospi rose 0.5 percent to another record. The index is up 2.9 percent for the week, the biggest gain in two months. 
• Hong Kong’s Hang Seng Index was flat, keeping its weekly gain at 1.8 percent, while the Shanghai Composite increased 0.1 percent.

--With assistance from Adam Haigh

To contact the reporter on this story: Robert Brand in Cape Town at rbrand9@bloomberg.net.

To contact the editors responsible for this story: Samuel Potter at spotter33@bloomberg.net, Natasha Doff