NEW YORK (Reuters) - The U.S. dollar touched its lowest level in nearly eight months on Monday, lifting metals prices and commodity sector stocks, and U.S. crude reversed losses to settle above $40 a barrel.
Safe-haven gold hit a three-week high while the yen hit its highest against the dollar in almost a year and a half, as investors remained anxious about the strength of the global economy. The yen's strength pushed Tokyo to warn it could again intervene against its currency's rally.
On Wall Street stocks gave up gains in late trading to end lower, with miners and banks the only gainers ahead of the unofficial start to quarterly reporting season.
Earnings at S&P 500 companies are expected to have fallen 7.7 percent in the first quarter from a year ago. Excluding the energy sector, reeling from the slide in crude prices since mid 2014, the S&P earnings decline estimate improves to minus 2.6 percent according to Thomson Reuters I/B/E/S data.
"This is just all jitters and anticipation of the beginning of earnings season," said Jonathan Corpina, senior managing partner with Meridian Equity Partners in New York. "The expectations aren’t that high for earnings this quarter, so I think investors are starting to feel a little uneasy about that."
The Dow Jones industrial average .DJI fell 20.55 points, or 0.12 percent, to 17,556.41, the S&P 500 .SPX lost 5.61 points, or 0.27 percent, to 2,041.99 and the Nasdaq Composite .IXIC dropped 17.29 points, or 0.36 percent, to 4,833.40.
Volume on U.S. exchanges was 7.6 percent below the average in the past 10 days.
Europe's FTSEuroFirst 300 index of leading shares .FTEU3 ended up 0.3 percent, helped by miners and a rally in Italian bank shares. European stocks have fallen for the last four weeks, and another down week would mark their worst run since mid-2013.
MSCI's gauge of shares across the globe .MIWD00000PUS rose 0.1 percent and Nikkei futures NKc1 fell 0.5 percent.
The U.S. dollar was last down less than 0.1 percent against the yen at 107.96 yen JPY= from a low of 107.61, the strongest reading for the yen since late October 2014.
The greenback's slide against Japanese currency prompted a warning from Japan's Chief Cabinet Secretary Yoshihide Suga, who said recent yen moves were one-sided and speculative and that the government would take steps as needed.
"The market is not afraid of intervention at these levels," said Vassili Serebriakov, currency strategist at BNP Paribas in New York. "Most people would look at 100 yen as the more realistic level in which Japan could intervene."
The euro EUR= was little changed on the day against the greenback at $1.1405, still not far from a six-month high touched last week.
The dollar index .DXY hit its lowest level since late August.
The weaker dollar helped lift gold to its highest in three weeks. Spot gold XAU= rose to $1,258.70 an ounce, its highest since March 22. It was last up about 1.4 percent at $1,257.26.
Peru's select stock index .SPBLPGPT rose 8.6 percent, the most for any session since late 2008, while the sol PEN=PE currency strengthened 2.6 percent, its largest one-day percentage gain since at least 2002. Keiko Fujimori, the conservative daughter of a jailed former president, was heading toward a tight runoff against investor favorite Pedro Pablo Kuczynski.
In bond markets, the benchmark Treasury 10-year note US10YT=RR was little changed, down 1/32 in price to yield 1.7254 percent from 1.722 percent late on Friday.
Brent crude prices rose to a four-month high as a rally in wider commodities markets encouraged buying ahead of a meeting of oil producers in Doha next Sunday, aimed at freezing current output levels.
Brent crude futures LCOc1, the global benchmark, were up 2.2 percent at $42.85 a barrel, having touched a session high of $43.06, the highest level since Dec. 7. U.S. crude futures CLc1 rose 1.7 percent to $40.40 a barrel. Both Brent and U.S. crude rose more than 6 percent on Friday.
Reporting by Rodrigo Campos, additional reporting by Lewis Krauskopf and Gertrude Chavez-Dreyfuss; Editing by Chizu Nomiyama and Cynthia Osterman