Stocks slip, U.S. dollar firm on Fed outlook
By Herbert Lash and Dion Rabouin
NEW YORK (Reuters) - A gauge of global stock markets slipped on Tuesday as the Dow and S&P 500 notched their first back-to-back losses in more than a month, while expectations the Federal Reserve will raise interest rates supported the U.S. dollar.
Shares of large U.S. pharmaceutical and biotechnology companies sold off after a tweet from U.S. President Donald Trump on the need to lower drug prices. Shares of Pfizer Inc (PFE.N: Quote) and Amgen Inc (AMGN.O: Quote) each dropped more than 1 percent.
The dollar .DXY rose 0.16 percent against a basket of six major trading currencies, 0.29 percent against the British pound GBP= and 0.14 percent against the Swiss franc CHF= ahead of the Fed's meeting next week. Jitters over economic and political developments in Europe also lifted the greenback.
U.S. Treasury yields rose, supporting the dollar, as investors made room for this week's supply of government debt and also in anticipation of a Fed rate hike this month.
The monthly U.S. jobs report, due on Friday, is expected to show an increase of 190,000 jobs, probably enough to push the Fed to raise its base rate again for the second time in four months.
The market is taking in stride expectations the Fed will raise rates, unlike past years, said Rahul Shah, chief executive of Ideal Asset Management in New York.
"As long as we keep getting macroeconomic data that's supportive of a rate hike we're going to continue to see stocks rally," Shah said. "If financials continue to rally with higher rates and industrials rally with better economic data, that could be enough to power the market higher," he said.
The Dow Jones Industrial Average .DJI closed down 29.58 points, or 0.14 percent, to 20,924.76. The S&P 500 .SPX lost 6.92 points, or 0.29 percent, to 2,368.39 and the Nasdaq Composite .IXIC dropped 15.25 points, or 0.26 percent, to 5,833.93. Continued...