US stocks drop lower led by technology shares; dollar hits a low

Reuters NEW YORK | Updated on May 19, 2021

Dow Jones index down 0.25 per cent, S&P 500 slips 0.28 per cent, while Nasdaq adds 13.70 points

Wall Street stocks fell on Tuesday, with technology shares turning lower in late trading, while the US dollar touched its lowest level since late February.

The Dow and S&P 500 added to declines in late-day trading, while the Nasdaq briefly turned lower. The S&P 500 technology index reversed early gains.

Losses in telecommunications shares overshadowed upbeat news from retailers. Walmart, the world's biggest retailer, raised its full-year earnings forecast. AT&T Inc added to declines from Monday, when it said it would cut its dividend payout ratio.

Investors have been considering whether rising inflationary pressure in the US could force the Federal Reserve to reduce its support in order to prevent the world's largeste conomy from overheating.

Fed Vice-Chair Richard Clarida on Monday pointed to the weak April jobs report as proof of lingering weakness in the economy.

Several Fed policymakers are expected to speak this week and the US central bank is due on Wednesday to release the minutes from its April policy meeting, which will be read closely for any indications about where monetary policy is headed this year.

"We're seeing this dollar weakness against numerous pairs and the market is starting to believe the Fed that we’re going to have low interest rates a lot longer," said Edward Moya, senior market analyst at OANDA in New York.

"That's going to be bearish for the dollar. You'll eventually see commodity-based currencies outperforming," Moya said.

The dollar index fell 0.463 per cent, with the euro up 0.61 per cent to $1.2225.

The progress of Covid-19 vaccine deployment and easing of measures to contain the pandemic have lifted higher-risk currencies that stand to benefit most from economic revival.

Bitcoin edged higher but remained near the three-month low it hit after Tesla Inc boss Elon Musk dampened enthusiasm for the cryptocurrency over the weekend.

On Wall Street, the Dow Jones Industrial Average fell 86.39 points, or 0.25 per cent, to 34,241.4, the S&P 500 lost 11.8 points, or 0.28 er cent, to 4,151.49 and the Nasdaq Composite added 13.70 points, or 0.1 per cent, to 13,392.75.

The pan-European STOXX 600 index rose 0.17 per cent and MSCI's gauge of stocks across the globe gained 0.40per cent.

Nominal US Treasury yields remained little changed, with the yield on 10-year Treasury notes up 0.5 basis point at 1.654 per cent.

US gold futures gained 0.03 per cent to $1,867.80 an ounce.

Brent crude oil hit $70 a barrel for the first time since March before trading down. Brent crude fell 1.1 per cent to settle at $68.71, while US West Texas Intermediate crude dropped 1.2 per cent at $65.49.

Published on May 19, 2021

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