Dollar edges up, stocks stall as Trump's comments offset data

Thu Feb 2, 2017 4:46pm EST
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By Dion Rabouin

NEW YORK (Reuters) - The dollar rebounded from its weakest level against six major rivals since mid-November on Thursday, while world equity markets were mixed as investor concerns about the Trump administration's aggressive posture offset strong data on the world economy.

U.S. stocks closed marginally lower as investors turned their focus to President Donald Trump's priorities. In a meeting with lawmakers, Trump said he would like to speed up talks to either renegotiate or replace the North American Free Trade Agreement.

Trump also told reporters separately that "nothing is off the table" in dealing with Iran after its recent ballistic missile test. Washington is expected to impose sanctions on multiple Iranian entities as early as Friday, but in a way that will not violate the 2015 Iran nuclear deal, sources familiar with the matter said on Thursday.[L1N1FN1PU]

"The market had only priced in the potentially good type of policies like tax cuts," said Arian Vojdani, investment strategist at MV Financial in Bethesda, Maryland.

"Now we're seeing potential protectionist and populist sentiment really come out and take the front seat. That could be bad for the world economy and that’s why markets are taking a step back."

Investors weighed concerns about Trump's protectionist bent against solid economic readings from around the globe on manufacturing and inflation that have suggested improving fundamentals in 2017 as they positioned ahead of Friday's U.S. nonfarm payrolls report.

"Tomorrow's NFP report is very, very important," said Douglas Cote, chief market strategist at Voya Investment Management. "The ADP report yesterday was very strong, corporate earnings were very strong, so we are in a positive fundamental backdrop for the economy, for corporations, for employment."

The Dow Jones Industrial Average fell 6.03 points, or 0.03 percent, to 19,884.91, the S&P 500 gained 1.3 points, or 0.06 percent, to 2,280.85 and the Nasdaq Composite dropped 6.45 points, or 0.11 percent, to 5,636.20.On Wednesday, the Federal Reserve left interest rates unchanged after its latest policy meeting even as it painted an upbeat picture of the economy.   Continued...

Traders work on the floor of the New York Stock Exchange (NYSE) shortly after the opening bell in New York, U.S., January 31, 2017. REUTERS/Lucas Jackson