US stock prices dipped yesterday after the Dow and Standard & Poor’s 500 hit record intraday highs for a fifth straight session, while the dollar rose against the yen on the prospect of a delay in a planned sales tax hike in Japan.
Oil prices fell further on the stronger dollar and robust output from US shale fields, with Brent crude dropping to a four-year low below $82 a barrel.
“We have come pretty far, pretty fast. I wouldn’t be surprised to see the market consolidate a little, in the form of hovering around here or pulling back a little bit,” David Lebovitz, global market strategist at J.P. Morgan Funds in New York, said of US equities.
In midday trading, the Dow Jones industrial average was down 8.97 points, or 0.05 per cent, to 17,604.77, the S&P 500 was down 1.29 points, or 0.06 per cent, to 2,036.97, and the Nasdaq Composite was down 2.99 points, or 0.06 per cent, to 4,648.63.
European shares were boosted by positive corporate results. The pan-European FTSEurofirst 300 index closed up 0.3 per cent, as strength in telecoms stocks offset a fall in Italian shares.
Earlier, a 2.1 per cent rise propelled Tokyo’s Nikkei to its highest close since October 2007 on speculation that Prime Minister Shinzo Abe might postpone a sales tax hike planned for next October and call a snap election.
The MSCI world equity index, which tracks shares in 45 nations, ticked up 0.1 per cent at 420.43.
The rally in Japanese stocks helped push the yen lower versus the dollar. The greenback hit a seven-year high against the Japanese currency, of 116.11 yen in European trading on the EBS trading system.
The euro gained 0.25 per cent at $1.2520, rebounding from a two-year low of $1.2358 hit on Friday.
In the bond market, yields on lower-rated Spanish and Italian government bonds fell after a member of European Central Bank’s Executive Board, Yves Mersch, said on Monday that the “critical” state of the eurozone economy made ECB purchases of government debt possible.
The US bond market was closed for the Veterans Day holiday.
In the energy market, Brent crude futures in London fell $1.23, or 1.49 per cent, at $81.11 a barrel after hitting a four-year low of $81.23.
Brent crude has lost nearly 30 per cent since June, partly due to rising production, especially in the United States.
US crude was last down 31 cents, or down 0.4 per cent, at $77.09.
Spot gold rose $14.16, or 1.23 per cent, to $1,164.29 an ounce, after dropping two per cent on Monday, as bargain hunters emerged.