Dow Hits 10th Straight Daily High as Dollar Slips: Markets Wrap

(Bloomberg) -- The Dow Jones Industrial Average closed at an all-time high for the 10th consecutive day Thursday, as the dollar slid for a second straight session after minutes from the Federal Reserve’s last meeting showed officials were confident they could raise interest rates gradually without triggering inflation. U.S. stocks pared losses.

The S&P 500 Index was up slightly, rebounding from a loss of as much as 0.3 percent earlier in the day, while the Dow added 0.16 percent. U.S. bonds moved higher with European debt. French bonds advanced after a pact between independent presidential candidate Emmanuel Macron and centrist Francois Bayrou helped ease fears the country could elect a leader who favors leaving the European Union. Crude climbed back above $54 after an industry report showed U.S. stockpiles fell.

The rally that brought the value of global equities to more than $70 trillion and the MSCI All-Country World Index to a record appears to have lost momentum as money managers grapple with political uncertainty and the Fed’s schedule for lifting borrowing costs. In an interview with Bloomberg, Treasury Secretary Steven Mnuchin signaled no urgency to designate China a currency manipulator, contradicting an October pledge by then-candidate Donald Trump to direct his Treasury secretary to name China a manipulator on the first day of his administration.

“Optimism is a mile high, but an inch deep,’’ said John Manley, chief equity strategist for Wells Fargo Funds Management in New York. “People are being pulled into this stock market. They’re worried it’s gone up too fast.’’

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What traders are likely watching out for:

• Trump met with corporate chief executives to discuss job creation and his plans to craft new tax and trade policies.

• Billionaire Warren Buffett releases his annual letter to shareholders with Berkshire Hathaway Inc.’s earnings over the weekend.

• Legislators in the U.K. will consider changes to the Brexit bill next Monday and Wednesday that may address the rights of EU citizens in Britain and give parliament a binding vote on the final deal.

Here are the main moves in markets:

Stocks

• The Nasdaq Composite Index fell 0.43 percent and Russell 2000 Index lost 0.65 percent.

• The Dow put up its longest streak of record closes since 1987.

• Construction-related shares slumped after Axios reported that a massive federal infrastructure bill may have to wait until 2018 amid a crowded congressional to-do list. The S&P Supercomposite Construction & Engineering Index dropped 2.8 percent.

• The Stoxx Europe 600 index slipped 0.14 percent.

Currencies

• The Bloomberg Dollar Spot Index fell 0.34 percent, extending Wednesday’s losses.

• The euro advanced 0.24 percent to $1.0583.

Bonds

• The yield on 10-year Treasury notes dropped four basis points to 2.38 percent.

• French bonds rallied as the yield on bonds due in a decade fell three basis points to 0.98 percent.

Commodities

• West Texas Intermediate gained 1.44 percent to $54.36 a barrel; Brent climbed 1.1 percent to $56.46.

• Gold added 1.35 percent to $1,250.00 an ounce as the outlook for higher U.S. interest rates and a stronger dollar offset the effect of investors seeking a haven from political risk in the U.S. and Europe.

• U.S. natural gas advanced 1.27 percent to $2.625 per million British thermal units, extending its rebound off a six-month low.

--With assistance from James Herron Vassilis Karamanis Simon Ballard Brian Chappatta Stephen Spratt Sid Verma V. Ramakrishnan and Jeremy Cooke

To contact the reporters on this story: Eric J. Weiner in New York at eweiner12@bloomberg.net, Lu Wang in New York at lwang8@bloomberg.net.

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Eric J. Weiner

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