US stocks turn lower, dollar steady on weak retail report

Bloomberg

US stocks sank as weak retail sales fanned concern that consumer spending is cooling, while the dollar held steady on bets the Federal Reserve won’t be forced to quicken the pace of rate hikes. Ten-year Treasury yields tightened.
The drop in retail spending provided a second data point, after Tuesday’s tepid inflation figures, to suggest unsteady growth in the world’s largest economy.
Trading in S&P 500 Index shares was more than 10 percent below the 30-day average as investors await next week’s Fed rate decision. Among the index laggards were Kohl’s Corp. and Macy’s Inc., as well as Boeing Co., which fell after a key supplier said it was working through a tough quarter to meet demands of increased 737 production.
The Stoxx Europe 600 Index retreated from earlier gains, and benchmarks dropped across Asia after the sudden firing of US Secretary of State Rex Tillerson. The euro declined after Mario Draghi’s comment that recent gains weren’t all warranted by economic fundamentals. News that factory output and investment growth in China had unexpectedly accelerated boosted most industrial metals, with copper heading for a two-week high.
Oil declined after OPEC raised its expectation for supply growth from the US and other producers for a fourth consecutive month.
Draghi said in a speech that the euro’s recent gains were due to more to external factors than euro-area economic growth, and might weigh on inflation. The European Central Bank president also noted that adjustments to monetary policy will remain predictable as policy makers look for further evidence that inflation is moving in the right direction.
Tillerson’s ouster raised concerns of a new guard in the White House that may take a harder line on trade, advancing President Donald Trump’s agenda of imposing tariffs. To replace Tillerson, Trump nominated CIA director Mike Pompeo, an ex-congressman who has endorsed “pushing back against the Chinese threat.” The change comes as the administration considers tariffs on a broad range of Chinese imports, with Politico reporting one proposal is to take measures against more than $30 billion of goods a year.
Inflation data on Thursday is a focal point in the euro area. Also this week, Germany’s Angela Merkel is inaugurated to a fourth term, and EU27 government officials discuss the European Union’s Brexit position. New Zealand GDP data is out Thursday. Meanwhile, Russians will go to the polls on Sunday to vote in a presidential election that Vladimir Putin is expected to win.
The S&P 500 Index declined 0.5 percent in New York. The Stoxx Europe 600 Index fell 0.2 percent. The UK’s FTSE 100 Index declined 0.1 percent. Germany’s DAX Index fell less than 0.05 percent. The MSCI Emerging Market Index fell 0.5 percent, its first retreat in a week.
The Bloomberg Dollar Spot Index fell less than 0.05 percent. The euro declined 0.3 percent to $1.2357. The British pound fell 0.2 percent to $1.3932. The Japanese yen climbed 0.4 percent to 106.13 per dollar. The yield on 10-year Treasuries fell four basis points to 2.81 percent. Germany’s 10-year yield declined three basis points to 0.59 percent. Britain’s 10-year yield fell five basis points to 1.438 percent.
West Texas Intermediate crude declined 0.3 percent to $60.53 a barrel. Gold fell 0.1 percent to $1,325.25 an ounce. LME copper climbed 0.6 percent to $6,987.50 per metric ton.