Tech Weighs on U.S. Stocks as Bonds Gain on Data: Markets Wrap

(Bloomberg) -- Selling in technology shares that have led markets higher in 2017 resumed Monday, as U.S. stocks failed to sustain a rally in global equities that started in Asia. Treasuries advanced after data showing a steeper drop in durable goods than forecast raised concern about the pace of U.S. economic growth.

The Nasdaq 100 Index retreated, leaving it 1.8 percent below its June 8 high. Most stocks in the S&P 500 Index advanced, with rate-sensitive shares pushing the gauge to a slight gain even as its largest cohort declined. European shares rose on news of an Italian bank clean-up and Dan Loeb’s investment in Nestle SA. Treasuries turned higher as an unexpected drop in orders for business equipment last month signaled slowing momentum in the world’s largest economy. The dollar advanced.

Gains in global stocks to start the week faded in the U.S., where major benchmark indexes were mixed before a jam-packed agenda for central-bank speakers in the next days. Comments are due from Janet Yellen, Mario Draghi, Mark Carney, Haruhiko Kuroda and more. The report on U.S. durables goods kicks off a string of economic data that may also drive momentum in financial markets, with key reports due on inflation, employment, manufacturing and housing from China to the U.S.

There is “very little risk we see any central bank surprises,” Robert Rennie, Sydney-based head of global market strategy at Westpac Banking Corp., told Bloomberg TV. “It looks like it’s a positive summer for risk sentiment. That certainly favors higher equity and higher yielding currencies at least in the very short term.”

Meanwhile, multiple markets will be disrupted this week because of public holidays, including in India, Malaysia, Indonesia, the Philippines, Singapore, Bangladesh, Saudi Arabia, Bahrain, Egypt, Kuwait, Oman, Qatar, Turkey and the United Arab Emirates.

Read our Markets Live blog here.

Central bankers aren’t the only things to watch this week:

• U.S. spending data may reveal consumers are only moderately rebounding and the inflation backslide is continuing.

• The U.S. Energy Information Administration holds its 2017 energy conference this week.

• President Donald Trump will host India’s Prime Minister Narendra Modi and South Korean President Moon Jae-in.

• The Bank of England’s Financial Policy Committee releases its stability report on Tuesday and Governor Mark Carney holds a press conference.

• The Federal Reserve is set to announce the results of the second part of its annual U.S. bank stress test on Wednesday.

• China’s PMI might have declined in June after unexpectedly remaining unchanged in May, reflecting government offers to cut overcapacity and leverage.

• Also due this week: Japanese inflation, factory output, unemployment, household consumption and housing starts; rate decisions in Colombia, the Czech Republic and Armenia.

Here are the main moves in markets:

Stocks

• The S&P 500 Index rose less than one point to 2,439.01 at 4 p.m. in New York. The index erased early gains before rebounding in the afternoon to post a modest advance.

• The Nasdaq 100 fell 0.4 percent after surging more than 0.7 percent in the first hour of trading.

• The Stoxx Europe 600 Index rose 0.4 percent to the highest in a week. Nestle surged 4.3 percent.

• The MSCI Emerging Market Index rose 0.8 percent to the highest since May 26.

• Italy’s FTSE MIB Index surged 0.8 percent, falling back after touching its highest level in a month.

Commodities

• West Texas Intermediate crude rose 0.9 percent to settle at $43.38 a barrel after five weeks of losses.

• Gold futures sank 0.9 percent to $1,246.60 an ounce.

Currencies

• The Bloomberg Dollar Spot Index was little changed after three days of declines.

• The British pound was virtually unchanged at $1.2722.

• The euro was flat at $1.1193.

Bonds

• The yield on 10-year Treasuries fell one basis point to 2.13 percent.

• U.K. benchmark yields fell two basis point to 1.01 percent.

• Italian yields fell two basis points to 1.89 percent.

--With assistance from Adam Haigh

To contact the reporters on this story: Jeremy Herron in New York at jherron8@bloomberg.net, Samuel Potter in Dubai at spotter33@bloomberg.net.

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Eric J. Weiner

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