Shares edge lower while dollar at eight-month highs ahead of Fed, U.S. data
By Angela Moon
NEW YORK (Reuters) - 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 .MIWD00000PUS down 0.2 percent after a weak outlook from U.S. package shipper United Parcel Service Inc (UPS.N: Quote) 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 .DJI fell 70.48 points or 0.42 percent, to 16,912.11, the S&P 500 .SPX dropped 8.96 points or 0.45 percent, to 1,969.95, and the Nasdaq Composite .IXIC 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. Continued...