U.S. Stocks Can't Hold Gains After Hitting Records: Markets Wrap

Treasury yields jump above 2.6% for the first time since March

Dollar drops with oil, copper rises on metals strength

Amid the threat of rising yields "you can hedge that risk and try to hide," says Alberto Gallo of Algebris.

U.S. stocks dipped one day after racing to all-time highs. The yield on 10-year Treasuries climbed above 2.6 percent for the first time since March, while the dollar failed to hold the previous day’s gain.

Most major equity gauges were lower, led by weakness in real estate, energy producers and household products makers. The move in Treasuries came as the possibility of a government shutdown after temporary funding runs out on Jan. 19 appeared to increase. In addition, investors speculated that Apple Inc. may sell some securities to pay the tax bill it will incur from it’s planned cash repatriation. 

“We looked at (the government shutdown) backwards and forwards, and after a while it’s just exhausting,” Chris Harvey, head of equity strategy at Wells Fargo & Co., said on Bloomberg TV. “At the end of the day, I don’t think it really affects the capital markets all that much. We’ve seen it before, not a big deal.”

Bloomberg’s Kevin Cirilli reports on efforts by Congress to pass a stopgap bill to keep the government funded.

(Source: Bloomberg)

European stocks advanced but struggled to stay in the green as the euro shrugged off ECB attempts to talk down the currency earlier this week. West Texas oil slipped amid signs that U.S. crude stockpiles continued to shrink. And base metals advanced following strong Chinese growth data.

China’s better-than-expected figures only added to the narrative of synchronized expansion, which -- alongside upbeat profit expectations -- could mean the bull run in stocks will keep going until 2019 or beyond, according to a Bank of America survey of fund managers.

Elsewhere, gold rose after two days of declines, and bitcoin steadied above $11,000. Emerging-market stocks gained for a fifth straight day.

Terminal users can read more in our markets blog.

These are the main moves in markets:

Stocks

The S&P 500 fell 0.2 percent to 2,798.03, while the Dow Jones Industrial Average retreated 0.4 percent to 26,017.81.

The Stoxx Europe 600 Index rose 0.2 percent.

The MSCI All-Country World Index slid less than 0.1 percent.

The U.K.’s FTSE 100 Index dipped 0.3 percent.

Germany’s DAX Index gained 0.7 percent, the largest rise in almost two weeks.

Currencies

The Bloomberg dollar spot index dropped 0.2 percent.

The euro advanced 0.4 percent to $1.224.

The British pound rose 0.4 percent to $1.3892, the highest since June 2016.

South Africa’s rand increased 1.3 percent to 12.1375 per dollar, the strongest in more than two years.

Bonds

The yield on 10-year Treasuries gained three basis points to 2.6163 percent, the highest in more than 10 months.

Britain’s 10-year yield advanced two basis points to 1.33 percent.

Germany’s 10-year yield added one basis point to 0.573 percent.

Commodities

Gold was little changed at $1,326.85 an ounce.

West Texas Intermediate crude fell 0.3 percent to $63.78 a barrel.

Copper futures advanced 0.3 percent to $319.90 per pound.

— With assistance by Adam Haigh, and Eddie Van Der Walt

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