NEW YORK (Reuters) - Bond prices and the yen rallied on Thursday as investors sought the safety of low-risk assets, while crude oil prices and stocks retreated after recent gains.
An index of world equity markets snapped a five-day winning streak. Oil prices dipped as a firmer dollar sparked profit-taking after three sessions of gains.
The yen, which investors prefer in times of market uncertainty, reached a three-year peak against the euro EURJPY= and a five-week high versus the U.S. dollar JPY. But late in the U.S. session, the Japanese currency fell marginally against the dollar.
“It’s generally a cautious mood today. You have stocks lower and yields lower,” said Eric Viloria, currency strategist at Wells Fargo Securities in New York.
The dollar index, which tracks the greenback against six major currencies .DXY, rebounded from five-week lows set on Wednesday. It was up 0.54 percent at 94.095.
The greenback was supported by an unexpected drop in U.S. jobless claims and a stronger-than-expected rise in wholesale sales in April. The data soothed some concerns about the U.S. economy decelerating in the second quarter.
Oil, which earlier hit a 2016 high on supply worries, was pressured by the firmer dollar. A stronger dollar makes oil more expensive for holders of other currencies.
“So far this looks like a modest technical correction following three days of gains, rather than a major reversal,” said Tim Evans, energy futures specialist at Citi Futures in New York.
The MSCI world equity index .MIWD00000PUS of shares in 45 nations, pulled back from a six-week high hit on Wednesday and was down 0.62 percent.
On Wall Street, stocks ended slightly lower after three days of gains, weighed down by financials and energy companies.
The Dow Jones industrial average .DJI fell 19.86 points, or 0.11 percent, to close at 17,985.19, the S&P 500 .SPX lost 3.64 points, or 0.17 percent, to finish at 2,115.48 and the Nasdaq Composite .IXIC was dropped 16.03 points, or 0.32 percent, to end at 4,958.62.
Europe’s broad FTSEurofirst 300 index .FTEU3 closed down 0.94 percent at 1,340.20. Stocks were hurt by weaker commodities-related shares and comments from European Central Bank President Mario Draghi that Europe is at risk of suffering lasting economic damage from weak productivity and low growth.
In the bond market, U.S. Treasury yields dipped to 3-1/2 month lows as falling oil and stock prices boosted demand for safe-haven debt.
The Treasury Department sold $12 billion worth of 30-year bonds at a yield of 2.475 percent, the lowest at an auction of this maturity since January 2015.
“It was a very solid auction,” said Gennadiy Goldberg, an interest rate strategist at TD Securities in New York.
“It doesn’t show any investor hesitation at lower yields, which is really a factor of falling global interest rates.”
Benchmark 10-year notes US10YT=RR gained 8/32 in price to yield 1.68 percent, the lowest since Feb. 24.
Brent crude LCOc1 settled down 56 cents, or 1.07 percent, at $51.95 a barrel, while U.S. crude CLc1 settled down 67 cents, or 1.31 percent, at $50.56.
Copper CMCU3 fell 2 percent to near a four-month low of $4,485.50 a tonne, on the firmer dollar.
Spot gold XAU= was up 0.52 percent to $1,268.35 an ounce after hitting a three-week high.
Additional reporting by Karen Brettell, Barani Krishnan and Richard Leong in New York; Editing by Nick Zieminski and Dan Grebler