Stocks Drop From Record Highs; Treasuries Gain: Markets Wrap

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15 Jan 2020, 04:48 AM IST

Stocks Drop From Record Highs; Treasuries Gain: Markets Wrap

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S. (Photographer: Michael Nagle/Bloomberg)

(Bloomberg) -- U.S. stocks retreated from all-time highs after Bloomberg reported that tariffs on billions of dollars of Chinese goods will likely stay in place until after the presidential election.

The S&P 500, Nasdaq Composite and Dow Jones Industrial indexes all pulled back from records as the conditions underscored lingering concern about future progress in negotiations. Positive results from big banks had driven prices higher. Treasuries climbed earlier after a gauge of underlying inflation rose less than forecast.

“There was a lot of optimism built up and now this just throws a whole new wrench into that optimism,” said Ryan Nauman, a market strategist at Informa Financial Intelligence’s Zephyr. It raises “a lot of questions moving forward.”

The two sides have an understanding that no sooner than 10 months after the signing of the agreement at the White House Wednesday, the U.S. will review progress and potentially trim tariffs now in place on $360 billion of imports from China, according to people familiar with the matter.

The Stoxx Europe 600 Index closed up for the first time in three sessions. Earlier in Asia, stocks finished slightly higher.

The Chinese yuan held most of its surge from Monday, when Washington lifted its designation of the country as a currency cheat. The dollar held its gains after the inflation data, while the pound broke a five-day slide.

Here are some events to watch for this week:

Phase one of the U.S.-China trade deal is set to be signed on Wednesday in Washington.
The biggest American financial institutions kick off earnings season, with Bank of America Corp., Goldman Sachs Group Inc., Morgan Stanley and BlackRock Inc. next up.
The Fed’s so-called beige book is due on Wednesday.
China GDP comes on Friday.

These are the major moves in markets:

Stocks

The S&P 500 Index decreased 0.2% to 3,282.93 as of 4:01 p.m. New York time.

The Dow Jones Industrial Average advanced 0.1% to 28,938.66.

The Nasdaq Composite Index dipped 0.2% to 9,251.33.

The MSCI All-Country World Index was little changed at 573.45, the highest on record.

The Stoxx Europe 600 Index jumped 0.3% to 419.59.

Currencies

The Bloomberg Dollar Spot Index was little changed at 1,193.13.

The Japanese yen was little changed at 109.96 per dollar, the weakest in about eight months.

The euro decreased 0.1% to $1.1128.

The British pound increased 0.3% to $1.3022, the first advance in more than a week.

Bonds

The yield on two-year Treasuries declined one basis point to 1.57%, the lowest in a week on the biggest drop in more than a week.

The yield on 10-year Treasuries fell three basis points to 1.81%, the lowest in more than a week on the largest drop in more than a week.

Germany’s 10-year yield declined one basis point to -0.17%.

Britain’s 10-year yield decreased three basis points to 0.72%, the lowest in six weeks.

Commodities

West Texas Intermediate crude advanced 0.5% to $58.38 a barrel, the first advance in more than a week.

Gold depreciated 0.1% to $1,547.01 an ounce, the weakest in more than a week.

--With assistance from Gregor Stuart Hunter.

To contact the reporters on this story: Vildana Hajric in New York at vhajric1@bloomberg.net;Claire Ballentine in New York at cballentine@bloomberg.net

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Dave Liedtka