US stocks fluctuate on data as oil, dollar slump

Washginton - US stocks fluctuated near records as data showing steady growth in the services industries bolstered confidence in the economy. Treasuries fell with the dollar a markets shrugged off the latest terror attacks in the UK Crude slumped.

The S&P 500 Index erased early losses as industries that make up the bulk of the economy continued to expand at a solid pace in May. Miners weighed on European equities, as zinc and tin led base metals lower.

 Markets were closed for a public holiday in a number of European countries including Germany, Norway and Ireland. Mexico’s peso traded at the strongest level in seven months. Oil erased gains sparked by a political spat between several energy-producing nations in the Middle East.

The red day across many commodities reflects ongoing uncertainty about the demand for raw materials, with the bearish sentiment toward copper firming up and signs of ample supply in metals like zinc. The key for the assets may be how investors gauge the strength of global economic growth and its ability to withstand rising borrowing costs or an end to the era of easy central bank cash.

“Metals appear to be taking their cue from concern over weaker growth and that may be spilling over,” Robin Bhar, an analyst at Societe Generale SA in London, said by phone. “We had fairly mixed manufacturing PMI’s last week and the jobs data out of the US was uninspiring.”

While the Federal Reserve has entered a blackout period ahead of the US rate decision next week, there’s still plenty on the agenda: 

• Former FBI Director James Comey will testify before Congress following his dismissal by Donald Trump.
• UK voters go to the polls on Thursday. Surveys of voters over the past few weeks have indicated a tightening race, increasing the chance that Prime Minister Theresa May might not get an increased majority.
• Mario Draghi holds forth after Thursday’s ECB meeting. Don’t expect policy changes, but the bank may drop the reference to “downside” risks to growth, while reiterating a weak inflation outlook, Bloomberg Intelligence said.
• Policy decisions from central banks in India and Australia are due during the week, as well as data on Chinese trade and inflation, US factory orders, European industrial output figures and GDP reports for Australia, Japan and the euro area.

Here are the main moves in markets:

Stocks 

The S&P 500 was little changed as of 16:03. The benchmark index gained 0.4% to a record on Friday. The Stoxx Europe 600 Index declined 0.2% with basic resources producers down 0.6%. MSCI’s emerging-market index added 0.2%. The measure is higher by 18% in 2017.

Commodities

West Texas Intermediate crude declined 1.2% to $47.07 a barrel in New York, after dropping 1.5% on Friday. Gold rose 0.3% to $1 283.80 an ounce. Copper fell 0.5% to $5 636 a ton and zinc traded 1.4% lower at $2 492 a ton on the London Metal Exchange. 

Currencies 

The Bloomberg Dollar Spot Index dropped 0.1%, adding to a 0.4% decline on Friday. The yen fell 0.2% to 110.58 per dollar. Japan’s currency climbed 0.9% on Friday after the US data. The Mexican peso jumped 1.8%.

President Enrique Pena Nieto’s party is ahead in the election for governor of Mexico’s largest state. Follow more on the vote here. The pound climbed 0.1% after erasing an earlier loss. The euro fell 0.3% to $1.1248.

Bonds

The yield on 10-year Treasury notes rose two basis points to 2.18% after dropping five basis points on Friday. UK benchmark yields climbed one basis point.

Asia

Japan’s Topix index fell 0.1%, after closing on Friday at the highest since August 2015. The Shanghai Composite Index slipped 0.5%, while Taiwan’s Taiex increased 0.7% and Malaysia’s benchmark gained 0.7%.

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