Stock prices around the world fell yesterday on profit-taking, while the euro dropped to an 11-1/2 year low ahead of a European Central Bank meeting where policymakers are expected to offer details on their bond purchase stimulus plan.
The Dow Jones industrial average and Standard & Poor's 500 retreated further from the record highs set on Monday, while major gauges on top European and Japanese shares were below their multi-year peaks.
“Given the strength we've had in the equity markets since the beginning of February, we are transitioning into a sideways-trending market as investors digest the recent gains and look for greater clarity,” said Terry Sandven, senior equity strategist at US Bank Wealth Management in Minneapolis. Brent crude hovered near $60 a barrel after data showed US crude inventories climbed to a record high in the latest week.
The US government's February payrolls report due tomorrow is seen as the week's premier data.
Further evidence of jobs and wage growth would support the notion the Federal Reserve will raise interest rates as early as this summer.
A private report on US jobs issued yesterday trimmed expectations of a robust February payroll figure. Payroll processor ADP said domestic companies added 212,000 workers last month, slightly less than forecast.
A separate report showed the US services sector grew at a faster pace and added more workers in February. Economists polled by Reuters projected total US payrolls grew 240,000 in February, below January's 257,000 increase. The benchmark US 10-year Treasury yield was flat at 2.12 per cent, paring its earlier decline after the stronger-than-expected services sector data.
In midday US trading, the Dow was down 81.30 points, or 0.45 per cent, at 18,122.07. The Standard & Poor's 500 Index was down 8.21 points, or 0.39 per cent, at 2,099.57. The Nasdaq Composite Index was down 10.11 points, or 0.20 per cent, at 4,969.79. The pan-European FTSEurofirst 300 index ended up 0.7 per cent at 1,557.03, recovering from a drop on Markit's final eurozone composite purchasing managers' index (PMI) that came in weaker than an initial estimate.
Tokyo's Nikkei ended down 0.6 per cent despite data showing a pick-up in China's services sector and a surprise rate cut in India.