- Oil falls as Qatar rift threatens output cuts
- Sterling recovers as investors focus on election
- Wall Street closes lower as Apple losses offset gains in energy and finance sectors
- Eyes are on Thursday's ECB meeting
- Gold retreats after six-week high on Friday's U.S. jobs report
Wall Street stocks dipped on Monday, weighed down by Apple, as world equity markets fell with oil prices, while the U.S. dollar recovered from a near seven-month low against the euro.
Sterling firmed as investors focused on the impending British election, and Friday’s disappointing U.S. employment report initially lifted gold prices to a six-week high and boosted Treasury yields as investors booked profits.
“We had a pretty significant reaction to payrolls, which was a little overdone,” said Bruno Braizinha, interest rates strategist at Societe Generale in New York.
The data initially pushed gold to its recent high of $1,282 an ounce because it dimmed prospects for an aggressive interest rate run. Higher rates pressure gold prices by increasing the opportunity cost of holding non-yielding bullion.
But gold retreated and was flat at $1,279. Even so, markets signaled they expect the U.S. Federal Reserve to raise interest rates next week.
U.S. stock indexes were pulled down by Apple shares, which fell as the iPhone maker unveiled products and services at its annual developers conference.
The drop partly offset gains in energy and financial stocks, some of this year’s worst-performing sectors that attracted bids despite lower oil prices and a flat yield curve.
The Dow Jones Industrial Average fell 22.25 points, or 0.1 percent, to 21,184.04, the S&P 500 lost 2.97 points, or 0.12 percent, to 2,436.1 and the Nasdaq Composite dropped 10.11 points, or 0.16 percent, to 6,295.68.
The pan-European FTSEurofirst 300 index lost 0.13 percent and MSCI’s gauge of stocks across the globe shed 0.13 percent.
In the Middle East, Qatar’s main stock index fell more than 7 percent. Saudi Arabia – the world’s biggest crude oil exporter – the United Arab Emirates, Egypt and Bahrain cut ties with Qatar, accusing the Gulf Arab state of supporting terrorism.Qatar is the world’s biggest supplier of liquefied natural gas (LNG) and a major supplier of condensate.
Brent crude fell nearly 1 percent on concerns that the cutting of ties with Qatar could hamper a global deal to reduce oil production.
Brent was last at $49.47, down 0.96 percent, and U.S. crude fell 0.59 percent to $47.38 per barrel.
Qatar’s crude output ranks as one of the smallest among the Organization of the Petroleum Exporting Countries, but tension within the cartel could weaken the supply deal aimed at supporting prices.
“While we would not want to read too much into this in terms of looming trouble for OPEC, the fact that Qatar’s stance toward Iran is a key element in this issue does make for a potentially more complicated setup at future meetings should the issue not have been resolved in due time,” JBC Energy analysts said in a note.
Britain’s pound initially fell half a cent against the dollar after the third militant attack in Britain in less than three months but recovered and was 0.09 percent higher.
Prime Minister Theresa May said Thursday’s election would go ahead. Opinion polls in the past week have put her Conservatives ahead, though with a narrowing lead over the Labor opposition.
“Even if May does just about enough to increase the majority – that could still potentially be sterling positive,” said ING currency strategist Viraj Patel.
The dollar steadied against a basket of currencies, recovering from a near-seven-month low hit on Friday, as investors turned their focus to this week’s impending European Central Bank meeting and the UK election.
The dollar index rose 0.09 percent, having hit its lowest since Nov. 9 after Friday’s U.S. jobs report.
European Central Bank policymakers this week are expected to take a more benign view of the euro zone economy and discuss dropping pledges to ramp up economic stimulus if needed, sources with direct knowledge of the discussions told Reuters last week.
The euro was down 0.21 percent to $1.1256 and the Japanese yen weakened 0.03 percent versus the greenback at 110.46 per dollar.
For Reuters Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets
(Additional reporting by Zandi Shabalala in London and Gertrude Chavez-Dreyfuss, Rodrigo Campos, Saqib Iqbal Ahmed, Devika Krishna Kumar and Sam Forgione in New York; Editing by Nick Zieminski and Dan Grebler)