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Global stocks retreat from early gains as oil, copper fall

Published 01/16/2018, 02:55 PM
Updated 01/16/2018, 02:55 PM
© Reuters. FILE PHOTO: A street sign for Wall Street is seen outside the New York Stock Exchange in New York City

By Chuck Mikolajczak

NEW YORK (Reuters) - World stock markets edged lower on Tuesday, giving back earlier gains as Wall Street retreated from initial highs as a decline in oil and metals weighed on the energy and materials sectors.

Wall Street initially moved higher, as the Dow breached the 26,000 mark for the first time. The healthcare sector, up 0.52 percent, provided support to the upside, with Merck (N:MRK) up 6.9 percent and UnitedHealth (N:UNH) up 2.3 percent.

UnitedHealth posted quarterly results that topped analyst estimates and raised its 2018 outlook, bolstering optimism for another solid quarter for corporate earnings.

Earnings growth for the quarter is forecast at 11.9 percent, according to Thomson Reuters data through Tuesday morning.

But each of the major Wall Street indexes fell into negative territory as materials (SPLRCM), down 1.3 percent and energy (SPNY), off 1.2 percent, slumped.

Oil prices eased from three-year highs as traders booked profits from the rally but healthy demand underpinned prices near $70, a level not seen since 2014's market slump.

U.S. crude fell 0.68 percent to $63.86 per barrel and Brent was last at $69.28, down 1.39 percent on the day.

Copper lost 1.37 percent to $7,111.50 a tonne, touching a 3-1/2 week low following strong gains late last year and as worries lingered over fading demand in China.

"Copper has had a huge run and so has oil, frankly," said Randy Frederick, vice president of trading and derivatives for Charles Schwab (NYSE:SCHW) in Austin, Texas.

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"When you have big gains in anything and you have a lot of unrealized profits out there, whether it is equities or commodities that have gone straight up, there is reason to take some profits off the table, put on some hedges."

The Dow Jones Industrial Average (DJI) fell 8.82 points, or 0.03 percent, to 25,794.37, the S&P 500 (SPX) lost 8.74 points, or 0.31 percent, to 2,777.5 and the Nasdaq Composite (IXIC) dropped 33.00 points, or 0.45 percent, to 7,228.07.

Citigroup (N:C) shares rose 0.4 percent to $77.15 after earnings topped expectations, the latest major U.S. bank to post results for the fourth quarter. The S&P financial index (SPSY) is up nearly 5 percent to start the year.

Shares in Europe closed little changed as commodity stocks also weighed.

The pan-European FTSEurofirst 300 index (FTEU3) percent and MSCI's gauge of stocks across the globe (MIWD00000PUS) shed 0.04 percent after hitting a record for a third straight session.

The euro

U.S. long-dated Treasury yields rose as equities retreated. Benchmark 10-year notes (US10YT=RR) last rose 3/32 in price to yield 2.5426 percent, from 2.552 percent late on Friday.

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