US stocks edged lower in early trading and the 10-year Treasury yield pushed above 3.1% as global markets continue to grapple with the outlook for the world’s largest economy. Brent crude punched through the $80 per barrel-mark.
The S&P 500 index fell as disappointing results from Cisco Systems weighed on technology shares. The dollar added to its highest levels of the year after data on manufacturing and employment showed economic strength. West Texas oil climbed above $72 a barrel and Brent hit its highest in four years.
In Europe, the common currency euro was slightly weaker and Italian bonds dropped as party leaders sealed an agreement to form a populist government. The pound jumped but then pared gains amid conflicting reports over Britain’s future in the EU customs union. The Stoxx Europe 600 index advanced. Earlier in Asia, equities rose in Japan and fell in Australia and Korea.
Recent evidence that the world’s largest economy will continue to pick up steam is currently just a consolation prize for investors, who are having to adjust to the highest US bond yields in years as well as second-guess issues stretching from peace on the Korean peninsula to Italian populists forming a government. Looming over it all are trade talks between the US and China, the outcome of which could cement the global growth story -- or derail it.
Elsewhere, the Turkish lira deepened its losses, while emerging-market stocks slipped.
The S&P 500 fell 0.1% at 9:31 AM (EST). Cisco fell 4%, the most in six weeks The Nasdaq Composite index slipped 0.3 %.</li><li>The Stoxx Europe 600 index increased 0.3% to the highest in 15 weeks. Germany’s DAX Index rose 0.3% to the highest in 15 weeks on the biggest advance in a week. The MSCI Emerging Market Index sank 0.5% to the lowest in more than a week. The MSCI Asia Pacific Index declined 0.2% to the lowest in a week.
The Bloomberg Dollar Spot Index rose 0.1% to the highest in 20 weeks. The euro dipped less than 0.05% to $1.1803, the weakest in five months. The British pound rose 0.1% to $1.3504. The Japanese yen decreased 0.3% to 110.71 per dollar, the weakest in more than 16 weeks. The Turkish lira sank 0.8% to 4.4485 per dollar, the weakest on record.
The yield on 10-year Treasuries was unchanged at 3.10%, the highest in about seven years. Germany’s 10-year yield gained two basis points to 0.62%. Britain’s 10-year yield climbed three basis points to 1.503%, the highest in more than three weeks. Italy’s 10-year yield rose two basis points to 2.135%, the highest in about seven months.
Brent crude gained 0.8% to $79.92 a barrel, the highest in more than three years. West Texas Intermediate crude increased 0.9% to $72.11 a barrel, also the highest in more than three years. Gold dipped 0.1% to $1,289.88 an ounce, the weakest in 20 weeks.