NEW YORK (Reuters) - Gold hit an eight-month high while world stock markets were mixed ahead of further U.S.-Sino trade talks, a raft of technology company results, including Apple’s, and a Federal Reserve decision on U.S. interest rates.
The U.S. dollar traded little changed and oil prices rose after Washington slapped sanctions on Venezuela’s state-owned oil firm in a bid to curb its crude exports as traders prepared for major events, including a key Brexit vote late in the day.
Sterling fell after British lawmakers rejected most amendments that aimed to keep Britain from leaving the European Union without a deal, reviving worries of a chaotic withdrawal from the trading bloc that would damage the UK economy.
Sterling fell sharply after a brief rise and was down 0.75 percent.
Investors expect the Fed, the U.S. central bank, to show a more cautious stance when policymakers release a statement on Wednesday after a two-day meeting. U.S. economic data in December that was softer than expected and a sharp downturn in financial markets are likely to keep the Fed from raising rates.
Equity markets in Europe rose as investors bid up stocks considered safer during times of economic uncertainty, such as utilities. However, a gauge of global stock performance edged lower as stocks on Wall Street fell amid a ream of mixed earnings reports and caution due to the U.S.-China trade spat.
MSCI’s gauge of stocks across the globe was little changed, while the FTSEurofirst 300 index of leading regional shares in Europe closed 0.8 percent higher.
The Dow Jones Industrial Average rose 51.74 points, or 0.21 percent, to 24,579.96. The S&P 500 lost 3.85 points, or 0.15 percent, to 2,640 and the Nasdaq Composite dropped 57.40 points, or 0.81 percent, to 7,028.29.
The information glut this week will make it hard for people to reach a conclusion but the trade talks with China, which begin Wednesday, are the overriding issue for the world economy, said David Kelly, chief global strategist at JPMorgan Funds in New York.
What Washington, and possibly Beijing, fail to understand is that the uncertainty about trade is slowing the global economy, which will show up in East Asian PMI manufacturing data for January to be released on Thursday, Kelly said.
“The biggest tax levy by Washington is an uncertainty tax, and it’s the biggest threat to the markets and the economy this year,” Kelly said.
Tensions were high after U.S. officials announced criminal charges against China’s telecom giant Huawei for violating U.S. sanctions against Iran.
For Asia, the blow was cushioned by promises of more Chinese stimulus but Beijing berated Washington for blocking tactics in its World Trade Organization appeal against U.S. tariffs.
Amid the uncertainty, safe-haven gold broke through $1,310 an ounce in spot prices to reach its highest since last May.
U.S. gold futures settled up 0.4 percent at $1,308.90 per ounce.
Oil price gains were capped by abundant supply and signs of a slowing Chinese economy. Brent crude oil futures rose $1.39 to settle at $61.32 a barrel while U.S. West Texas Intermediate (WTI) crude futures gained $1.32 to settle at $53.31.
Market participants will have catalysts for trading all week, with more than one-fifth of companies on the benchmark S&P 500 index reporting results, including Amazon, Microsoft and Facebook.
Apple Inc reported earnings after the bell and said sales for its fiscal second quarter would most likely be lower than Wall Street expected.
The outlook suggested Apple still faces weak demand for its iPhone, especially in China, the world’s biggest smartphone market. But Apple shares rose 4.3 percent in after-hours trading on upbeat comments from Chief Executive Tim Cook.
U.S. Treasury yields fell across maturities as investors anticipated strong demand for $78 billion of new issues on sale later in the day and on data showing U.S. consumer confidence at its lowest since July 2017.
Benchmark 10-year U.S. Treasury notes rose 9/32 in price to push their yield down to 2.7116 percent.
The dollar index rose 0.06 percent, while the euro gained 0.01 percent to $1.1434. The Japanese yen weakened 0.01 percent versus the greenback at 109.33 per dollar.
Reporting by Herbert Lash in New York; Editing by Diane Craft, James Dalgleish and Dan Grebler