Stocks ticked down from six-month highs on Thursday on concern over a stalled U.S. economic relief deal, while oil fell and the euro edged up against the U.S. dollar.
Treasury yields hit multi-week highs after record supply at a 30-year bond auction drew poor demand.
Initial claims for U.S. state unemployment benefits dipped below 1 million last week for the first time since mid-March, but the expiration at the end of July of a $600 weekly jobless supplement likely contributed to the decline.
Data showed the world’s largest economy regained only 9.3 million of the 22 million jobs lost between February and April. But Wall Street has recovered most equity market losses, and the benchmark S&P 500 was within a few points of a record high.
“Our take on a new high, if it happens, is that it’s another reminder to investors how disconnected the stock market and the economy have been this year. Stocks have soared but the economy – it’s improved, yes – but a million initial claims is still not good,” said Ryan Detrick, senior market strategist at LPL Financial in Charlotte, North Carolina.
The Dow Jones Industrial Average .DJI fell 80.12 points, or 0.29%, to 27,896.72, the S&P 500 .SPX lost 6.92 points, or 0.20%, to 3,373.43 and the Nasdaq Composite .IXIC added 30.27 points, or 0.27%, to 11,042.50.
The STOXX 600 suffered its first fall in five days after Washington said it would maintain 15% tariffs on planes and 25% tariffs on other European goods.
The pan-European index lost 0.63% and MSCI’s gauge of stocks across the globe .MIWD00000PUS shed 0.04%.
The five-month global rally has caused MSCI’s world index .MIWD00000PUS to rise 50% from its March lows and reach within 2% of an all-time high.
In the currency and bond markets, faltering hopes for a compromise between Republicans and Democrats over additional stimulus for the U.S. economy dragged the dollar index =USD down, though it pared losses late in the session.
The greenback =USD fell 0.139%, with the euro EUR= up 0.28% to $1.1815.
The Japanese yen weakened 0.01% versus the dollar to 106.92 per dollar, while Sterling GBP= was last trading at $1.3068, up 0.28% on the day.
A sell-off in benchmark government bond markets also eased, as investors digested the biggest-ever 10-year U.S. debt sale, and some surprisingly robust U.S. inflation figures.
U.S. Treasury yields rose to multi-week highs after the Treasury auction of a record amount of 30-year bonds.
Benchmark 10-year notes US10YT=RR last fell 11/32 in price to yield 0.7208%, from 0.686% late on Wednesday.
The 30-year bond US30YT=RR last fell 1-17/32 in price to yield 1.4297%, from 1.365%.
In Asia, Japanese stocks were the main mover, soaring 1.8% to a six-month peak .N225 on gains from chip firms.
Japan’s Nikkei futures NKc1 rose 0.04%. Emerging market stocks rose 0.20%.
Oil prices eased after underwhelming data, but the weak dollar limited losses. Traders kept an eye on U.S. stimulus headlines.
“Overall, neither yesterday’s OPEC or today’s IEA release appeared to have much effect on an oil market that is still primarily focused on the ongoing expansion in risk appetite that remains undeterred by lack of progress in formulating a viable U.S. stimulus deal,” said Jim Ritterbusch of Ritterbusch and Associates.
U.S. crude CLc1 recently fell 0.84% to $42.31 per barrel and Brent LCOc1 was at $45.05, down 0.84% on the day.
Spot gold XAU= added 1.9% to $1,953.22 an ounce. Silver XAG= gained 7.25% to $27.41.