World equity markets dipped yesterday, pausing after a string of record highs, while a decline in oil prices dragged on energy shares and the US stock market.
Shares on Wall Street took a breather, after the best performance of the year for the Dow and benchmark S&P 500 saw the indexes close above the 26,000 mark and the 2,800 threshold, respectively, for the first time.
Equities were held in check by the energy sector, which shed 0.48 per cent, dragged lower by a 2.53 per cent drop in Kinder Morgan in the wake of its quarterly results.
Oil prices were weighed down by a reported rise in US fuel stocks although losses were pared after EIA data showed a bigger-than-anticipated crude stock draw.
Mixed economic reports gave investors reason for pause as weekly initial jobless claims hit a 45-year low but US home-building recorded its biggest drop in just over a year.
“We are coming off such great housing reports that one is a little bit of a head scratcher for people,” said JJ Kinahan, chief market strategist at TD Ameritrade.
“After a big run-up like this, sometimes people are just looking for a reason to take some profits and with a lack of other things to point to, they can point to that.”
The Dow Jones Industrial Average fell 82.66 points, or 0.32 per cent, to 26,032.99, the S&P 500 lost 3.92 points, or 0.14 per cent, to 2,798.64 and the Nasdaq Composite dropped 2.49 points, or 0.03 per cent, to 7,295.79.
MSCI’s gauge of stocks across the globe shed 0.11 per cent, while the pan-European FTSEurofirst 300 index rose 0.09 per cent.
Investors have drawn inspiration from an improving global economy and the onset of the US corporate earnings season in the recent run higher. Earnings growth for the quarter is forecast at 12.2 percent, according to Thomson Reuters data through Wednesday morning.
Yields on US 10-year notes reached a 10-month high yesterday after China reported fourth-quarter growth that accelerated for the first time in seven years.
Underlining the momentum of the world economic expansion into the back end of last year, both Chinese fourth quarter growth of 6.8 per cent and December industrial output growth of 6.2 per cent were ahead of expectations.
Benchmark 10-year notes last fell 9/32 in price to yield 2.6108 per cent, from 2.578 per cent late on Wednesday. The data drove European counterparts higher as well, with Germany’s 10-year bond yield near a five-and-a-half-month top at 0.575 per cent.
The US dollar fell as traders piled into the euro, yen, sterling and other major currencies amid worries over a possible US government shutdown as lawmakers struggled to cobble together a federal budget deal.
The dollar was last down about 0.4 per cent with the euro up 0.35 per cent to $1.2227.