Breaking News

Dollar gains; Wall St. lower on home sales; oil off after data

ForexDec 28, 2016 05:13PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. U.S. dollar and British pound notes are seen in this picture illustration

By Rodrigo Campos

NEW YORK (Reuters) - The U.S. dollar rose on Wednesday on expectations for stronger U.S. economic growth, while stocks fell broadly as home resales dropped sharply.

The 10-year U.S. Treasury yield declined, but worries in Europe about rescue plans for shaky Italian banks drove the spread between the benchmark and 10-year German Bund yields to the widest ever.

On Wall Street, shares fell across the board with the S&P 500 posting its largest daily drop since Oct. 11.

Data showed contracts to buy previously owned U.S. homes fell in November to their lowest level in nearly a year, a sign that rising interest rates could be weighing on the housing market.

"There was enough bad news during the day" to pull the market lower, said Keith Bliss, senior vice-president at Cuttone & Co in New York referring to the housing data.

He said U.S. Secretary of State John Kerry's comments that Israel's building of settlements on occupied land was endangering Middle East peace made some traders nervous and exacerbated the decline.

The Dow Jones Industrial Average (DJI) fell 111.36 points, or 0.56 percent, to 19,833.68, the S&P 500 (SPX) lost 18.96 points, or 0.84 percent, to 2,249.92 and the Nasdaq Composite (IXIC) dropped 48.89 points, or 0.89 percent, to 5,438.56.

The pan-European FTSEurofirst 300 index (FTEU3) edged up 0.33 percent, while MSCI's gauge of stocks across the globe (MIWD00000PUS) fell 0.44 percent.

Emerging market stocks rose 0.77 percent.

Earlier, MSCI's broadest index of Asia-Pacific shares outside Japan (MIAPJ0000PUS) rose 0.5 percent while Japan's Nikkei (N225) closed little changed.

The dollar (DXY) rose on continued bets that the Federal Reserve will have to raise rates next year to keep up with inflation and growth brought by a planned fiscal stimulus from the incoming Trump administration.

"This is just a continuation of the trend" of dollar strength, said Axel Merk, president and chief investment officer of Palo Alto, California-based Merk Investments.

"People are trying to be aligned with the winning positions."

The dollar index (DXY) gained 0.23 percent. The euro fell 0.43 percent to $1.041 and the British pound dropped 0.39 percent to $1.2222.

Euro zone bond yields fell across the board as concerns about the strength of a rescue plan for Italian banks and normal year-end caution pushed investors to the safety of government debt.

Germany's 10-year yields hit their lowest in seven weeks at 0.181 percent. That in turn widened the yield gap to U.S. Treasuries, which act as the world's benchmark borrowing rate. The spread was last at 235.25 basis points.

Benchmark U.S. Treasury yields fell to their lowest levels in two weeks, however, after a well-bid 5-year note auction enticed buyers into U.S. government debt.

The 10-year U.S. Treasury yield hit a session low at 2.503 percent. Benchmark 10-year notes (US10YT=RR) last rose 15/32 in price to yield 2.5099 percent.

Oil prices edged up at settlement for a fourth consecutive session, edging close to their highest levels in 1-1/2 years, but they turned negative in post-settlement trade after API data showed a surprise build in U.S. crude inventories.

A looming supply cut from many major producers is expected to give crude prices support.

U.S. crude (CLc1) last fell 0.4 percent to $53.67 a barrel and Brent (LCOc1) traded at $55.95, down 0.3 percent on the day.

Oil has surged about 50 percent in 2016 even after plunging in January to its lowest in more than a decade.

Dollar gains; Wall St. lower on home sales; oil off after data

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email