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Major U.S. stock indexes end lower
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Oil prices near flat after Monday's rally
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Dollar index declines
(Updates with U.S. markets closing levels)
By Caroline Valetkevitch
NEW YORK, April 4 (Reuters) - World stock indexes
declined on Tuesday, with all three major U.S. stock indexes
ending lower, while the U.S. dollar fell to a two-month low and
Treasury yields eased after data suggested a cooling in the U.S.
labor market.
The U.S. Labor Department report showed U.S. job openings in
February dropped to the lowest level in nearly two years.
In addition, a separate report showed new orders for
U.S.-manufactured goods fell for a second straight month in
February amid ebbing demand for civilian aircraft.
The S&P 500 was pressured the most by the economically
sensitive industrial sector , which ended down 2.3%.
Materials also finished lower.
The yield on two-year Treasuries, which typically
move in step with interest rate expectations, fell 14 basis
points to 3.840%, while the benchmark 10-year note's yield slid 9 basis points to 3.342%.
Crude oil prices were near flat after Monday's sharp rally
tied to Sunday's announcement of an output target cut by the
Organization of the Petroleum Exporting Countries (OPEC) and its
partners.
Brent crude rose 1 cent to settle at $84.94 a
barrel, while U.S. crude gained 29 cents to settle at
$80.71.
The recent spike in oil prices has added to concerns about
higher costs for businesses and consumers, but some investors
think U.S. data signaling some cooling in the economy could
possibly allow the Federal Reserve to loosen monetary policy.
The Dow Jones Industrial Average fell 198.77 points,
or 0.59%, to 33,402.38, the S&P 500 lost 23.91 points, or
0.58%, to 4,100.6 and the Nasdaq Composite dropped 63.13
points, or 0.52%, to 12,126.33.
The pan-European STOXX 600 index lost 0.08% and
MSCI's gauge of stocks across the globe shed
0.24%.
The Fed and other central banks have been raising interest
rates to bring down inflation, and investors have been trying to
gauge how much longer the tightening cycle will continue.
"Cooling down of the labor market is one of the things
necessary to combat inflation," said Andrzej Skiba, head of the
BlueBay U.S. fixed income team at RBC Global Asset Management in
New York.
On Tuesday, rate futures markets were pricing in a roughly
even chance of a 25 basis-point rate hike in May, with rest of
the odds tilted toward a pause from the Fed. On Monday, the
probability of a 25-bp hike was more than 65%.
The U.S. dollar index dropped to a two-month low of
101.45 and was last down 0.5% at 101.56. Sterling rose to a new
10-month high against the dollar, while the euro reached its
highest level since February. The euro was last up
0.5% at $1.09550.
"We believe the buck will slowly but surely continue to
dwindle as the challenges of a recovering economy that wants to
get away from dollar dominance will put downward pressure on its
value," said Juan Perez, director of trading at Monex USA in
Washington.
The Australian dollar came under pressure after the
Reserve Bank of Australia left interest rates unchanged after 10
straight increases. It was last down 0.5% against the U.S.
dollar at $0.6754.
Spot gold added 1.8% to $2,020.42 an ounce.
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World FX rates YTD Global asset performance ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
(Reporting by Caroline Valetkevitch in New York
Additional reporting by Amanda Cooper in London and Herbert Lash
and Gertrude Chavez-Dreyfuss in New York
Editing by Jonathan Oatis, Matthew Lewis and Deepa Babington)
