por admin » Mar May 31, 2016 10:39 am
Stocks Mixed, But on Track for a Winning May
Expectations mount for the Fed to raise interest rates
By RIVA GOLD and AARON KURILOFF
Updated May 31, 2016 11:25 a.m. ET
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The Dow industrials and S&P 500 fell Tuesday, with major indexes still on track to end the month higher despite mounting expectations for a U.S. interest rate increase.
The Dow Jones Industrial Average fell 75 points, or 0.4%, to 17798. The S&P 500 lost 0.1% and the Nasdaq Composite Index gained 0.1%.
That left the Dow industrials on pace to finish the month 0.3% higher, while the S&P 500 was headed toward a 1.6% May gain.
Some analysts said the monthly gains for major indexes since their climb off February’s lows was an encouraging sign for equities markets, given new concerns about increased interest rates and other global uncertainty.
Janet Yellen, the U.S. Federal Reserve chairwoman, speaks with European Central Bank President Mario Draghi, ahead of a Group of Seven finance ministers and central bank governors meeting in Japan, on May 20. ENLARGE
Janet Yellen, the U.S. Federal Reserve chairwoman, speaks with European Central Bank President Mario Draghi, ahead of a Group of Seven finance ministers and central bank governors meeting in Japan, on May 20. PHOTO: BLOOMBERG NEWS
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Expectations for the Fed to announce an interest-rate increase this summer have risen dramatically since the start of the month, while the dollar has gained for four consecutive weeks.
“It’s encouraging, given what investors have had thrown at them,” said Mark Peden, investment manager at Kames Capital.
”Investors are taking the view that the economic cycle is beginning to normalize, and growth is perhaps not as horribly scarce out there as people thought,” he said.
Some traders said Tuesday’s moves marked a pause for investors ahead of the Fed’s June meeting and the vote over the U.K.’s membership in the European Union.
Key events later in the week include a European Central Bank meeting, an OPEC gathering and the final monthly U.S. jobs report before the Fed‘s June meeting.
“There’s a couple of big events on the horizon and I’d be surprised if the market moved a lot before them,” said Michael Antonelli, equity sales trader at Robert W. Baird.
U.S. consumer spending grew at the fastest pace in nearly seven years in April, rising 1% from a month earlier, the Commerce Department said Tuesday. The Conference Board’s consumer confidence index, however, slipped to 92.6 in May, from an upwardly revised 94.7 in April. It was the second straight monthly decline.
Following five consecutive sessions of gains, the Stoxx Europe 600 was on track to rise about 1.7% in May, its best monthly performance since November, despite falling 0.8% Tuesday.
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Shares in Asia mostly advanced, led by a 3.3% rise in the Shanghai Composite Index, its largest daily gain since March. Investors in the region hoped mainland-traded Chinese stocks may soon appear in the MSCI Emerging Markets Index, an influential global benchmark which could draw billions of dollars into Chinese equities.
The Nikkei Stock Average climbed 3.4% in May and Australia’s S&P ASX 200 gained 2.4%.
Earlier, the CSI 300 index futures contract due in June suddenly plunged 10%, but quickly bounced back to reverse losses in less than a minute.
Stocks in Japan added 1% Tuesday after data showed a continued recovery in Japanese industrial production. Australian shares were down 0.5%.
Japan’s finance minister also suggested at a news conference he would abide by Prime Minister Shinzo Abe’s decision to delay a sales-tax increase.
The moves came on the heels of a very quiet start to the week on Monday, as stocks in Europe and Asia inched higher in low volume trading.
In commodities, U.S. crude oil was up 1.1% at $49.87 a barrel. The Organization of the Petroleum Exporting Countries will meet later this week in Vienna, but analysts think the gathering is unlikely to result in any formal consensus on production cuts.
Gold was down 0.1% at $1,215.50 an ounce after snapping an eight-session losing streak on Monday.
In currencies, the dollar was down less than 0.1% against the yen at ¥110.9060, after advancing to a one-month high against the Japanese currency on Monday after Federal Reserve Chairwoman Janet Yellen signaled an interest-rate rise was likely soon.
The euro was down 0.1% against the dollar at $1.1130 after data showed the eurozone remained in deflation for a second straight month.