U.S. Stocks Retreat, Bonds Rise as Dollar Slips: Markets Wrap

(Bloomberg) -- U.S. stocks capped a third straight loss and Treasuries advanced as Federal Reserve Bank of Chicago President Charles Evans addressed the timing for further tightening. The dollar remained lower and gold advanced.

The S&P 500 Index slipped as Evans suggested two or three hikes might be warranted this year if economic data remain robust. The Fed last week raised interest rates and signaled it anticipated another two increases by year’s end. The 10-year Treasury yield fell below 2.47 percent. Emerging-market stocks rallied a seventh day. Crude fell for the ninth time in 11 days. Gold touched the highest level in two weeks.

Evans said he can support “two or three rate increases in 2017,” noting that labor markets have been “very strong.” The Fed official is one of several slated to speak this week as investors weight the path of monetary policy. Yields fell with the dollar last week after the Federal Reserve delivered a more dovish message than expected, even as it raised interest rates.

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What’s coming up this week:

• A televised debate, the first of the French election campaign, between the five main presidential contenders is scheduled during prime time on Monday.
• U.K. inflation may have edged above the 2 percent target in February and retail sales probably rose, data may show Tuesday.
• March PMI for France is due Friday, along with final fourth quarter GDP figures.
• There’s a torrent of Fed speakers this week, headlined by Janet Yellen on March 23.
• There are central bank policy decisions in New Zealand, Philippines and Sri Lanka.
• Japan Prime Minister Shinzo Abe will host trade talks with the European Union on Tuesday.

Here are the main market moves:

Stocks

• The S&P 500 fell 0.2 percent to 2,373.47 at 4 p.m. in New York, its lowest level since the Fed raised rates.
• The Stoxx Europe 600 Index dropped 0.2 percent, with oil and gas companies down 0.9 percent.
• The MSCI Emerging Market Index added 0.7 percent, headed for a seventh straight gain in its longest run since August.

Currencies

• Bloomberg’s dollar index fell 0.1 percent, headed for a fourth straight loss.
• The euro climbed 0.1 percent to $1.0743, while the British pound weakened 0.3 percent to $1.2355.
   

Bonds

• The yield on 10-year Treasuries slipped four basis points to 2.46 percent after falling four basis points on Friday.
• German bonds climbed one basis point to 0.44 percent.
• French 10-year bond yields rose one basis point to 1.12 percent ahead of the televised election debate.

Commodities

• Oil fell as a Libyan port is set to resume shipments and the U.S. drilling revival undermines the potential for OPEC output curbs to rebalance the market.
• West Texas Intermediate crude slid 1.2 percent to settle at $48.22 a barrel. It has dropped 11 percent this month, heading for the steepest one-month slide since July.
• Gold rose 0.2 percent to $1,226.14 an ounce to cap a fourth day of gains.
• Base metals fell on the London Metal Exchange, with zinc falling 0.6 percent to $2,864 a ton.

--With assistance from Sid Verma Eddie van der Walt and Mark Shenk

To contact the reporter on this story: Jeremy Herron in New York at jherron8@bloomberg.net.

To contact the editor responsible for this story: Jeremy Herron at jherron8@bloomberg.net.