US stocks fall on trade bluster, dollar drops to three-year low

Bloomberg

US stocks declined as Trump administration officials stepped up protectionist rhetoric. The dollar sank to a three-year low after American officials endorsed a weaker currency to boost exports.
Comments from Commerce Secretary Wilbur Ross and Treasury Secretary Steven Mnuchin set the tone on global financial markets on Wednesday, with the officials blaring the Trump team’s America First message before the president arrives at the Global Economic Forum in Davos, Switzerland, on Thursday.
The S&P 500 Index erased gains as Ross suggested the administration could enact further tariffs two days after putting levies on solar panels and washing machines.
The comments added to losses in the Nasdaq Composite Index sparked by poor results at Texas Instruments and United Continental Holdings.
Earlier Mnuchin’s comments added to pressure on a greenback that’s been in decline for a year, with the effects rippling across markets as growth in European and emerging-nation economies continues to accelerate past America. The yen pushed past 110 per dollar for the first time since September, and South Africa’s rand traded at the highest in more than two and a half years. Emerging-market stocks rose for a ninth day in the longest streak since 2015.
“We’re looking for the dollar to continue to depreciate against most currencies,” Daniel Morris, a senior investment strategist with BNP Paribas Asset Management, said in an interview with Bloomberg Television. “The US economy has a current-account deficit and it needs to close that — one way to do that is for the dollar to depreciate.”
The world’s business and political elites have gathered in Davos for an annual conference.
President Donald Trump is scheduled to arrive at the conference on Thursday as his team sharpens talk about a trade war and pushes protectionist policies.
The S&P 500 Index fell 0.1 percent of 11:38 am New York time. The Stoxx Europe 600 Index fell 0.3 percent, halting a four-day run. The MSCI All-Country World Index increased 0.3 percent to the highest on record.
The UK’s FTSE 100 Index sank 0.8 percent to the lowest in three weeks. The MSCI Emerging Market Index rose 0.6 percent with its ninth consecutive advance.
The Bloomberg Dollar Spot Index sank 0.9 percent to the lowest in more than three years on the largest decrease in more than a week. The euro jumped 0.7 percent to $1.2386, the strongest in more than three years on the biggest increase in more than a week. The British pound jumped 1.5 percent to $1.4216, the strongest in 19 months. The Japanese yen jumped 1.0 percent to 109.26 per dollar, the strongest in more than 19 weeks.
The yield on 10-year Treasuries advanced four basis points to 2.66 percent, the biggest gain in a week.