Stocks edge lower; crude rises to five-month high

Bloomberg

US stocks halted the longest rally since 2017 as investors awaited signs of progress in the trade war with China ahead of the latest corporate earnings season. Treasuries dropped, while West Texas crude hit a five-month high.
The S&P 500 edged towards its first decline in eight sessions, as the post-Christmas rally stalled with the index about 1.5 percent from reclaiming its all-time high. Catalysts remained scant after trade talks ended in Washington without any timetable for an agreement.
Company news dominated, with General Electric tumbling after JPMorgan cut its rating on the stock, and Boeing dropping amid the ongoing fallout surrounding the 737 Max airplane. Energy producers paced gains amid rising oil prices. The dollar fell.
Crude extended its advance as an escalation of fighting in Opec producer Libya overshadowed the biggest increase in US active rigs since May.
Following a stellar first quarter across many assets classes, investors are assessing prospects for further gains as the US-China seem unable to come to a final decision on trade and earnings season gets underway.
Despite a lack of details emerging from last week’s discussions, Trump economic adviser Larry Kudlow said the two sides are closer to a deal, and that top-tier officials would be talking this week.
A better US jobs report on Friday didn’t stop President Trump from suggesting the Fed should cut interest rates.
“There’s some perception that it’s not over until it’s over,” Tom Plumb, a portfolio manager at Plumb Balanced Fund based in Madison, Wisconsin, said about the trade talks.
Elsewhere, the pound edged higher as British Prime Minister Theresa May appealed to both the public and politicians in search of support for a compromise Brexit plan.
US banks begin reporting first-quarter earnings, led by JPMorgan and Wells Fargo. Israel votes in an election on Tuesday. The annual Spring Meetings of the World Bank Group and the IMF begin in Washington.
The ECB will probably leave its key interest rates unchanged Wednesday. Investors will be looking for further details on TLTRO.
The S&P 500 Index fell 0.4 percent in New York. The Stoxx Europe 600 Index decreased 0.2 percent. Germany’s DAX Index declined 0.4 percent, the first retreat in more than a week. The MSCI Emerging Market Index rose 0.2 percent, hitting the highest in more than eight months. The MSCI Asia Pacific Index gained 0.2 percent to the highest in about
six months.
The Bloomberg Dollar Spot Index fell 0.2 percent. The euro increased 0.5 percent to $1.1269, the strongest in almost two weeks. The British pound climbed 0.1 percent to $1.3048. The Japanese yen gained 0.3 percent to 111.44 per dollar, the biggest rise in more than two weeks.
The yield on 10-year Treasuries gained one basis point to 2.50 percent.
Germany’s 10-year yield fell less than one basis point to 0.004 percent. Britain’s 10-year yield decreased one basis point to 1.107 percent.
West Texas Intermediate crude rose 1.1 percent to $63.77 a barrel, the highest in five months.
Gold advanced 0.8 percent to $1,305.80 an ounce, the highest in more than a week.