U.S. stocks pull back from highs, dollar down vs yen

Mon Aug 5, 2013 4:52pm EDT
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By Leah Schnurr

NEW YORK (Reuters) - Stocks on Wall Street retreated from record levels during a quiet trading day on Monday, while the dollar fell against the yen as investors weighed the likelihood of when the Federal Reserve will pare back its economic stimulus program.

Encouraging signs of growth in the global economy, however, gave the U.S. currency support and kept declines in U.S. and European equities in check, while a better-than-expected pick-up in the U.S. service sector pushed bond yields to near two-year highs.

Without any other major news, U.S. shares were left directionless, with volume the lightest of the year for a full session.

"It was a pretty quiet day," said Paul Zemsky, head of asset allocation at ING Investment Management in New York. "We're almost done with earnings and the quarter will remain lackluster. It's hard to disappoint but earnings are not fantastic."

The S&P 500 stock index has risen for five of the past six weeks, gaining more than 7 percent over the period. It closed at an all-time high on Friday despite a disappointing read on the U.S. labor market.

Given that advance, further gains may be difficult at these levels, analysts said, especially with the corporate earnings season largely over.

"We have had such a strong run, a little bit of retracement could be expected in the markets over the coming weeks," said Sean Lynch, global investment strategist at Wells Fargo Private Bank in Omaha, Nebraska.

The Dow Jones industrial average .DJI fell 46.23 points or 0.3 percent, to 15,612.13, the S&P 500 .SPX lost 2.53 points or 0.15 percent, to 1,707.14 and the Nasdaq Composite .IXIC added 3.364 points or 0.09 percent, to 3,692.951.   Continued...

Workers speak above an electronic information board at the London Stock Exchange in the City of London January 2, 2013. REUTERS/Paul Hackett