Global equity prices steadied near their highest in almost a year yesterday as investors pared expectations of any near-term rise in US interest rates, but lower oil prices kept a lid on gains.
Oil prices fell more than three per cent on worries over Opec output. The US dollar recovered some ground against a basket of major currencies after its worst week in three months.
Wall Street was little changed but a slight advance earlier in the session allowed the S&P 500 to post a fresh intraday record high. The index has remained in a very tight range over the past 13 sessions and is struggling for direction.
Growth in US gross domestic product in the second quarter came in below expectations on Friday, fuelling speculation that the Federal Reserve may not pull the trigger on raising interest rates anytime soon.
On Monday, data showed that US manufacturing activity slowed in July as orders fell broadly, while a drop in construction spending in June suggested a downward revision to the second-quarter economic growth estimate.
The Dow Jones industrial average fell 52.28 points, or 0.28 per cent, to 18,379.96, the S&P 500 lost 4.92 points, or 0.23 per cent, to 2,168.68 and the Nasdaq Composite added 15.95 points, or 0.31 per cent, to 5,178.08.
The S&P Energy index, down 2.7 per cent, was the biggest loser among S&P 500 sectors.
MSCI’s world stocks index, which tracks shares in 45 nations, was last down 0.11 per cent. Earlier in the session the index touched its highest level in nearly a year.
Europe’s broad FTSEurofirst 300 index was down 0.61 per cent at 1,339.15. European stocks initially rose but gave up gains as bank shares turned broadly negative following Friday’s release of stress tests on 51 European Union lenders.
Oil prices fell with US crude hitting April lows, weighed by a survey showing output in Opec reached record highs last month and by the biggest addition of US oil rigs in two years.
Brent crude was down 3.2 per cent at $42.14 a barrel, while US crude was down 3.5 per cent at $40.14.
The dollar index rebounded helped by gains against the yen, which pulled back from three-week highs reached on Friday after the Bank of Japan eased policy less aggressively than expected.
The dollar index, which tracks the greenback against six major currencies, was up 0.14 pct to 95.665.
In bond markets, US Treasury yields rose from Friday’s multi-week lows on anticipation of a corporate bond offering from Microsoft, with profit-taking also fueling the move.
US 10-year Treasuries prices were last down 8/32 to yield 1.487 per cent, after touching a more than two-week low in yield of 1.450 per cent on Friday.
Spot gold prices were up 0.1 per cent to $1,352 an ounce.