US stocks closed lower on Tuesday after switching between gains and losses while oil declined. The dollar strengthened as Treasury yields rebounded after an initial decline, as investors bought safety assets such as sovereign bonds and gold following terrorist attacks in Brussels.
Comments by Chicago Federal Reserve President Charles Evans supported the dollar as they were deemed less dovish than usual. Evans said the median of policymakers’ individual projections of interest rates, known as the dot plot, represents his own views on where they should be. He is known as a supporter of slower rate hikes. The remark followed two Federal Reserve District Presidents’ comments on Monday that they would support a rate hike as early as April. According to live dollar index data, the ICE US Dollar Index, a measure of the dollar’s strength against a basket of six rival currencies, was up 0.4% at 95.662.
The S&P 500 lost 0.09% to 2049.8. Seven out of ten main sectors ended in negative territory, with consumer staples leading the decliners, down 0.75%. Healthcare stocks, up 0.9%, led the advancers. The Dow Jones Industrial Average lost 0.2%, settling at 17582.57.
In economic news Manufacturing PMI rose in March, indicating US manufacturing activity grew slightly faster. Today at 12:00 CET Mortgage applications will be released by the Mortgage Bankers Associations in US. At 15:00 CET February New Home Sales will come out. The tentative outlook is positive.
European stocks fell on Tuesday as a decline in travel-related stocks weighed on consumer services sector following the deadly attacks in Brussels. The euro was down 0.2% against the dollar at $1.1216 late Tuesday. The Stoxx Europe 600 index fell 0.2%. Air France (PA:AIRF) sank 4% and French hotel group Accor (PA:ACCP) SA tumbled 3.9%. Budget airline Ryanair Holdings (LON:RYA) dropped 2.2% and British Airways parent International Consolidated Airlines Group (LON:ICAG) lost 1.5%.
Germany’s DAX 30 ended 0.4% higher at 9990, supported by better-than-expected reading of business sentiment in March: the Ifo Institute’s German business climate index rose to 106.7 from 105.7 in February. The CAC 40 gained 0.1%, helped by a 3% gain in Renault (PA:RENA) after HSBC added the company to its "Europe Super 10" list, citing its growth prospects and attractive valuation. UK’s FTSE 100 also added 0.1%. Today at 16:00 CET March advance Consumer Confidence Index will be released in eurozone. The tentative outlook is negative.
Nikkei fell 0.3% today as stronger yen hurt exporter stocks amid higher demand for safe haven assets, following the terrorist attacks in Brussels. The trading volume was at the lowest level since late December with only 1.6 billion shares changing hands. Asian stocks were retreating, Hong Kong’s Hang Seng was down 0.25% while the Shanghai Composite Index was up 0.38%.
Oil futures prices are falling today as the report by American Petroleum Institute industry group showed US crude stockpiles rose more than expected last week: inventories rose by 8.8 million barrels to a record high of 531.8 million. May WTI crude fell 0.2% to $41.45 a barrel on the New York Mercantile Exchange yesterday, while May Brent crude gained 0.6% to $41.789 a barrel on London’s ICE Futures exchange. Today at 16:30 CET US Crude Oil Inventories will be released by the Energy Information Administration. Traders will be watching closely to see the change in US domestic production. A resumption of growth in US domestic crude output will be bearish for oil after recent rebound in oil prices.
Gold is falling today as stronger dollar dampened the attractiveness of the precious metal, despite higher demand for the safe haven asset after attacks in Brussels. Spot gold was down more than 1% to $1,234.44 an ounce.