Stocks Fall as Dollar Remains Under Pressure
July 24 2017 - 11:29AM
Dow Jones News
By Mike Bird and Kenan Machado
The Dow Jones Industrial Average fell Monday, putting the index
on track for its third consecutive session of declines.
The blue-chip index fell 63 points, or 0.3%, to 21517 shortly
after the opening bell. The S&P 500 shed 0.2% and the Nasdaq
Composite was little changed.
The dollar wavered after the WSJ Dollar Index fell to its lowest
close since Sept. 30 on Friday. Concern about policy direction from
the White House and Capitol Hill since the failure to repeal the
Affordable Care Act and investigations into contacts with Russians
before November's election have helped fuel dollar selling.
Sentiment on the dollar will stay negative until there is a
string of upbeat U.S. economic data along with a hawkish Federal
Reserve and a dovish European Central Bank, said Kay Van-Petersen,
a macro strategist at Saxo Bank in Singapore.
The Fed is scheduled to meet this week. Economists don't expect
a change in the fed funds target rate, but the central bank could
announce the beginning of its balance-sheet reduction.
The euro touched its highest intraday level since January 2015
during the early Asian trading session Monday, above $1.168, before
falling back. The euro was recently down 0.2% against the
dollar.
A stronger euro has knock-on effects for the European economy
and can weigh on earnings expectations for export-oriented
firms.
"If the euro remains at or above current levels, it is likely
increasingly to have a bearing on the euro area economic outlook,
weighing somewhat on GDP growth via net trade," said Chris
Scicluna, head of economic research at Daiwa Capital Markets
Europe.
The Stoxx Europe 600 index fell 0.2%, weighed down by a 1.1%
fall in Britain's FTSE 100 and a 0.1% drop in Germany's DAX.
Fresh economic data for the eurozone on Monday suggested the
economy grew slightly more slowly than analysts had expected during
July. The IHS Markit flash purchasing managers index, a key
business survey, came in at 55.8. That is lower than the 56.2
analysts had expected, and a six-month low for the index. Any
figure above 50 indicates an economy is growing.
Shares of major European auto makers were among the hardest hit
on Monday, after the European Commission's confirmation that it was
assessing accusations of coordination efforts by rival companies to
manipulate diesel engines to reduce emissions.
Shares in Volkswagen, Daimler and BMW fell by 2.9%, 3.6% and
3.2%, respectively.
Oil prices rose Monday after a decline on Friday as the
Organization of the Petroleum Exporting Countries continued to
grapple with the growing challenges to removing what it sees as a
global oversupply of oil from the market.
Saudi Arabian oil minister Khalid al-Falih said the country
would limit its oil exports and added that he wanted other
countries to follow suit. Despite a deal struck last year to take
out almost 1.8 million barrels of crude oil from the global market,
prices remain stubbornly low.
U.S. crude rose 1.3% to $46.38 a barrel Monday.
Japan's Nikkei Stock Average closed 0.6% lower. Among the
biggest stock decliners in Japan were export-reliant companies, as
is often the case when the yen strengthens, since that eats into
such firms' earnings.
Hong Kong's Hang Seng Index rose 0.5% after its nine-session
winning streak ended Friday.
Write to Mike Bird at Mike.Bird@wsj.com and Kenan Machado at
kenan.machado@wsj.com
(END) Dow Jones Newswires
July 24, 2017 11:14 ET (15:14 GMT)
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