Stocks Edge Lower as Tech Weighs; Treasuries Rise: Markets Wrap

(Bloomberg) -- U.S. equities edged lower as tech heavyweights weighed on benchmarks, while Treasuries gained ahead of the Federal Reserve’s meeting. The pound tumbled more than 1%.

The S&P 500 Index fell for the second time in three sessions after reaching a record Friday as Amazon Inc., Facebook Inc., Alphabet Inc. and Netflix Inc. all slid. Apple Inc. gained ahead of its earnings announcement Tuesday, helping to lift the Dow Jones Industrial Average. Drug companies got a boost from surging Mylan NV after the generic drugmaker and Pfizer Inc. announced merger plans.

The 10-year Treasury yield declined for a second day to 2.06% before the Fed’s anticipated rate cut on Wednesday. The dollar climbed to the highest in almost two months before a new round of trade talks between the U.S. and China this week. The pound slid to its lowest level in more than two years as U.K. Prime Minister Boris Johnson stepped up preparations for a no-deal Brexit.

Investors will be picking through any developments on trade as Chinese and American negotiators gather Tuesday for two days of talks, three months after negotiations broke down. Neither side is signaling much hope for a breakthrough. Meanwhile, Fed Chairman Jerome Powell’s post-meeting press conference on Wednesday will provide an opportunity to gauge the trajectory of U.S. rates after the central bank is tipped to ease policy. On a related theme, traders will eagerly await monthly employment data from the world’s largest economy at the tail end of the week.

“It’s a very important week not only because of the Fed. You do have an employment number, which is obviously overshadowed by the Fed, but you also have some interesting earnings,” said JJ Kinahan, chief market strategist at TD Ameritrade. “It makes it a very busy week.”

Corporate earnings will remain a focal point as investors stay vigilant for any signs that a global economic slowdown is being reflected in companies’ bottom lines. Among major earnings this week are Apple, Rio Tinto and carmakers Toyota and BMW.

Here are some of the key events to watch as the week unfolds:

• Earnings include: Nintendo, Qualcomm, AMD, Siemens, Sony, Credit Suisse, Nomura, Toyota, Honda, Ferrari, GM, BMW, Rio Tinto, ConocoPhillips, BP, Shell, Vale, Heineken, GE, Altria.
• Bank of Japan rate decision and Governor Haruhiko Kuroda briefing are due Tuesday.
• U.S. Trade Representative Robert Lighthizer and his team meet their Chinese counterparts in Shanghai Tuesday.
• Fed officials begin their two-day meeting on monetary policy in Washington Tuesday. Chairman Jerome Powell will hold a press conference following the FOMC’s decision Wednesday.
• The Bank of England policy decision is due Thursday.
• The U.S. July jobs report is due Friday.

These are the main moves in markets:

Stocks

• The S&P 500 Index fell 0.2% as of 4 p.m. New York time.
• The Dow Jones Industrial Average rose 0.1%.
• The Stoxx Europe 600 Index was little changed.
• The U.K.’s FTSE 100 Index increased 1.8% to the highest in almost a year.
• The MSCI Asia Pacific Index decreased 0.5% to the lowest in more than a week.

Currencies

• The Bloomberg Dollar Spot Index rose 0.1% to the highest in almost two months.
• The euro advanced 0.2% to $1.1145.
• The Japanese yen fell 0.1% to 108.79 per dollar, the weakest in almost three weeks.
• The British pound fell 1.3% to $1.2224, the biggest drop in more than eight months.

Bonds

• The yield on 10-year Treasuries dipped one basis point to 2.06%.
• Britain’s 10-year yield fell three basis points to 0.654%, the lowest in about three years.
• Germany’s 10-year yield declined two basis points to -0.39%, the lowest in more than three weeks.

Commodities

• Gold rose 0.5% to $1,426.13 an ounce.
• West Texas Intermediate crude gained 1.5% to $57.02 a barrel.

--With assistance from Tom Lavell, Laura Curtis and Sarah Ponczek.

To contact the reporters on this story: Randall Jensen in New York at rjensen18@bloomberg.net;Vildana Hajric in New York at vhajric1@bloomberg.net

To contact the editor responsible for this story: Samuel Potter at spotter33@bloomberg.net

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