NEW YORK (Reuters) - The U.S. dollar rallied against the yen on Monday amid firming bets for a U.S. interest rate hike late this year, while oil prices jumped about 3 percent to extend recent gains as speculation grew that OPEC would try to restrain output.
U.S. equity indexes receded after the S&P 500 and Nasdaq closed at fresh record highs Friday after a strong U.S. jobs report. The MSCI All-Country World equity index rose 0.3 percent, helped by stocks in Asia.
Friday’s employment report showed U.S. nonfarm payrolls rose by 255,000 jobs in July, more than the Reuters forecast of 180,000. Traders are now basically split on whether the Federal Reserve will raise benchmark U.S. rates at its December meeting, according to the CME Fedwatch tool.
”The market is still digesting a blockbuster payroll number and I think a lot of things are in motion right now to assess whether the Fed raises earlier than thought,” said Doug Cote, chief market strategist at Voya Investment Management in New York. “It certainly won’t be September, but it could possibly be December.”
The Dow Jones industrial average fell 40.41 points, or 0.22 percent, to 18,503.12, the S&P 500 lost 4.87 points, or 0.22 percent, to 2,178 and the Nasdaq Composite dropped 18.32 points, or 0.35 percent, to 5,202.80.
Gains in energy shares were countered by sharp declines in the healthcare sector.
U.S. equities have pushed higher amid a better-than-expected corporate earnings season, and will take their cues this week from the results of several consumer companies.
“I think the market is just kind of taking a breather at this point,” said Walter Todd, chief investment officer at Greenwood Capital in Greenwood, South Carolina. “There’s just not a whole lot of news flow to push it one way or the other.”
The pan-European STOXX 600 index edged up 0.04 percent. European bank stocks gained, helped by an upgrade for shares of Barclays.
The dollar climbed 0.2 percent against a basket of currencies, rising for a fourth straight session. Against the yen, the dollar gained 0.6 percent.
Oil prices jumped amid renewed speculation that OPEC would try to restrain output, easing oversupply worries that had pressured the market to three-month lows last week.
U.S. West Texas Intermediate crude settled up 2.9 percent at $43.02 per barrel, while Brent crude settled up 2.5 percent at $45.39.
Yields on U.S. Treasuries with longer-dated maturities edged up to their highest in more than two weeks on bets the Fed could raise rates by year-end.
Benchmark 10-year Treasury notes were unchanged in price to yield 1.5816 percent.
Spot gold edged up 0.08 percent after falling sharply on Friday.
Additional reporting by Dion Rabouin, Barani Krishnan and Karen Brettell in New York; Editing by Bernadette Baum and James Dalgleish