Stocks cool, bonds heat up as Trump optimism pauses

Fri Feb 24, 2017 4:45pm EST
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By Richard Leong

NEW YORK (Reuters) - Major global stock markets lost ground on Friday as investors scaled back bets U.S. President Donald Trump's policies would promote faster economic growth and instead favored perceived safer assets such as bonds and gold.

Oil futures fell, pressuring energy stocks after data showed U.S. crude inventories rose for a seventh week, signaling oversupply despite OPEC's efforts to rein in output.

The dollar reversed earlier losses, eking out gains for a third straight week even as the Trump administration's lack of details on fiscal reforms raised doubts about the chances for improved domestic growth in 2017.

"The market will come to realize that a lot of these pro-growth policies might get pushed to the end of this year or next year and you might have this buyer's remorse for the market," said Aaron Clark, portfolio manager at GW&K Investment Management.

The MSCI world equity index, which tracks shares in 46 nations, fell 0.3 percent, to 445.32. It reached an all-time peak at 447.67 on Thursday.

On Wall Street, however, the Dow Jones Industrial Average extended its winning streak to 11 sessions, the longest since 1987, and the S&P 500 rebounded from earlier losses. The Nasdaq Composite erased an earlier drop, paring its weekly loss.

The Dow ended up 11.44 points, or 0.05 percent, at 20,821.76; the S&P 500 closed 3.53 points, or 0.15 percent, higher at 2,367.34 and the Nasdaq finished up 9.80 points, or 0.17 percent, to 5,845.31.

The three indexes posted record highs this week, buoyed by confidence about company results in the coming quarters even without fiscal stimulus.   Continued...

A man looks at a stock quotation board outside a brokerage in Tokyo, Japan, April 18, 2016. REUTERS/Toru Hanai