NEW YORK (Reuters) - Oil prices fell on Monday as Iran dashed hopes of a coordinated production freeze, while the dollar rose ahead of a policy meeting at the U.S. central bank.
A gauge of stocks across the globe ticked up, with Wall Street weighed by commodity shares as Europe rose partly on a positive view of the auto industry.
Attention switched this week to policy decisions from the Bank of Japan, the U.S. Federal Reserve and the Bank of England, among others. They follow last week's interest rate cut, asset-purchase program extension and new cheap loans for banks pledge at the European Central Bank.
The Fed, which ends its two-day policy meeting on Wednesday, has said it is on track to raise rates gradually in 2016, but doing so will hinge on the health of the economy. Recent data has shown above-forecast jobs creation but wage growth remains a concern.
The euro EUR=, which rose last week after ECB President Mario Draghi signaled further rate cuts were unlikely, fell 0.5 percent on Monday to $1.1098. The yen was flat against the greenback while sterling GBP= fell 0.6 percent to $1.4302. The dollar index .DXY rose 0.5 percent.
"It's the combination of a market that overextended in the opposite direction because of Draghi's 'no more rate cut' comment and just some corrective natural price action into the risk of (a Fed meeting) that could be a little bit more hawkish," said Richard Scalone, co-head of foreign exchange at TJM Brokerage in Chicago.
On Wall Street, the S&P 500 was weighed by declines in basic materials and energy shares as commodity prices fell. As they also wait on the release of economic data, including U.S. retail sales, investors continued to interpret the ECB's move.
"To me, it's one of those days were the (stock) market is doing its best to digest some of those factors and to see what's next," said Steven Baffico, chief executive officer at Four Wood Capital Partners in New York.
Equity volume on U.S. exchanges was the lightest so far this year.
The Dow Jones industrial average .DJI rose 15.82 points, or 0.09 percent, to 17,229.13, the S&P 500 .SPX lost 2.55 points, or 0.13 percent, to 2,019.64 and the Nasdaq Composite .IXIC added 1.81 points, or 0.04 percent, to 4,750.28.
The pan-European FTSEurofirst 300 index .FTEU3, which had climbed 2.7 percent on Friday, ended up 0.67 percent with an index of auto and autoparts shares up 1.56 percent. MSCI's gauge of stocks across major markets .MIWD00000PUS ticked up 0.1 percent. Nikkei futures NKc1 rose 0.4 percent.
Brent crude oil LCOc1, whose rise has helped buoy stocks in recent weeks, fell below $40 a barrel, as U.S. crude stockpiles continue to mount and Iran maintained little interest in a global production freeze.
"We feel that the bulk of this stronger than expected 5-6 week price advance has been seen and that prices will be shifting into a near term consolidation phase," said Jim Ritterbusch of Chicago energy consultancy Ritterbusch & Associates.
Brent last traded at $39.61, down 1.9 percent. U.S. crude fell 3 percent to $37.34 per barrel.
The benchmark 10-year U.S. Treasury note US10YT=RR rose 4/32 in price to yield 1.9627 percent from 1.977 percent on Friday.
Spot gold XAU fell 1.1 percent, last trading at $1,234. Copper CMCU3 dropped 0.3 percent.
Additional reporting by Laila Kearney, Dion Rabouin, Barani Krishnan and Gertrude Chavez-Dreyfuss; Editing by Nick Zieminski and Meredith Mazzilli