Global equity markets eased yesterday as concerns about future economic growth weighed on share prices on Wall Street, while government debt prices fell on surprisingly strong US housing data.
A monthly gauge of US consumer sentiment fell in May as a gloomy view on income growth clouded an otherwise positive economic outlook, a preliminary reading of the Thomson Reuters/University of Michigan’s survey showed.
The sentiment data provided fodder to those who expect the economy to struggle in the second half of the year, while the housing data bolstered those who see stronger growth ahead. Weighing on that tug-of-war were expectations of a market correction.
MSCI’s all-country world index was down 0.05 per cent, falling for a third day and further retreating from a high set on Thursday.
The pan-European FTSEurofirst 300 index closed up 0.3 per cent to 1,361.54 points.
The Dow Jones industrial average rose 0.51 points to 16,447.32. The S&P 500 gained 0.97 points, or 0.05 percent, to 1,871.82 and the Nasdaq Composite dropped 5.848 points, or 0.14 percent, to 4,063.445.
The Russell 2000 index of small-cap companies briefly entered correction territory on Thursday, defined as a 10 per cent decline from a recent high. It subsequently pulled back and was 9.8 per cent below its high in morning trading yesterday.
“We’re in the middle of a rolling sector correction, where some areas of the market are performing better than others,” said Jerry Harris, president of asset management at Sterne Agee in Birmingham, Alabama, who noted that the S&P 500 hit an all-time record on Tuesday.
US Treasuries prices fell after the better-than-expected housing data pointed to a strengthening economy, pulling benchmark 10-year yields up from six-month lows.
Benchmark 10-year notes were last trading almost flat to yield 2.5035 per cent.
The dollar held steady against major currencies as selling of the currency faded with benchmark US yields stabilising at their lowest levels in six months.
The dollar traded at 101.46 yen, down 0.1 per cent, and above a two-month low of 101.31 yen set on Thursday.
The greenback rose against the euro, trading at $1.3700 , up 0.07 per cent.
Brent crude oil rose above $109 a barrel after a recovery in Libyan oil supply proved short-lived and as tension simmered over Ukraine. Brent crude rose 81 cents to $109.90 a barrel.
US crude climbed 63 cents to $102.13.