Euro, shares pause as investors turn cautious
By Richard Hubbard and Marc Jones
LONDON (Reuters) - World shares dipped on Monday and oil prices steadied due to investors' caution on whether the strength of the global economic recovery justifies the sharp rally so far this year.
U.S. stock index futures pointed to a similarly flat session on Wall Street, with traders reluctant to extend a rally that has taken the benchmark Standard and Poor's 500 index .SPX to its highest level in over five years.
The wariness is in anticipation of a series of significant U.S. economic events this week, including the initial estimate of fourth quarter GDP, the Federal Reserve's first policy meeting of the year and the January payrolls data.
"Markets don't go up in a straight line," said Garry Evans, global head of equity strategy at HSBC. "I think that people are realizing there could still be problems out there."
Adding to the potential pitfalls ahead were signs from Washington that the $1.2 trillion in automatic spending cuts due to take effect by March 1 could go ahead, threatening a hit to confidence in the giant U.S. economy.
MSCI's benchmark world share index .MIWD00000PUS was down 0.1 percent on Monday, though it has gained nearly 4.5 percent this month on signs of economic recovery in the United States, stabilization in the euro zone and accelerating growth in China.
European stocks were unchanged, with the broad FTSEurofirst 300 index .FTEU3 of top company shares hovering just under a two-year high.
The market's softer tone also followed a weaker session in Asia, where falls in technology companies saw the MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS drop 0.4 percent. Continued...