Dollar high over Euro
NEW YORK — World equity markets fell on Tuesday while the dollar reached eight-month highs against the euro on expectations of positive U.S. economic data and a more hawkish tone from the Federal Reserve.
Wall Street closed lower, sending the all World benchmark down 0.2 percent after a weak outlook from U.S. package shipper United Parcel Service Inc. weighed on investor sentiment and pressured transportation stocks.
Equity investors also showed reluctance to make bold moves ahead of U.S. economic news due this week, including a Federal Reserve meeting ending on Wednesday, GDP data on Wednesday and non-farm payrolls on Friday.
The Dow Jones industrial average fell 70.48 points or 0.42 percent, to 16,912.11, the S&P 500 dropped 8.96 points or 0.45 percent, to 1,969.95, and the Nasdaq Composite eased 2.21 points or 0.05 percent, to 4,442.70.
U.S. Treasuries prices increased after a new sale of five-year notes drew solid demand, and the U.S. yield curve flattened to five-year lows.
Long-dated Treasuries have been gaining against short- and intermediate-dated debt as investors reach for higher yields at the long end and worry about the Federal Reserve raising interest rates next year.
The yield spread between U.S. five-year notes and 30-year bonds flattened on Tuesday to 153 basis points, the lowest since 2009.
Thirty-year bond yields fell as low as 3.22 percent, the lowest since June 7 of last year.
“The theme has really been the flattening,” said Justin Lederer, an interest rate strategist at Cantor Fitzgerald in New York.