Equities in major markets slipped on Monday, weighed down by Wall Street on trepidation over first-quarter earnings, while crude prices added to last week's gains on concern about Middle East tensions.
U.S. stocks ended lower ahead, with traders waiting to see how much of an impact the strengthening dollar and falling oil prices had on Corporate America in the first quarter.
"Most investors seem to be a little concerned about what earnings will look like for the first quarter and what companies might have to say about the tone of their businesses moving into the second quarter," said John Carey, portfolio manager at Pioneer Investment Management in Boston, which has about $220 billion in assets under management.
"People are thinking earnings are going to be weak due to the strong dollar and lower oil prices and sluggish consumer spending due to the winter weather," Carey said. "But we'll see. I'm sure there'll be some positive surprises as well."
The Dow Jones industrial average fell 80.61 points, or 0.45 percent, to 17,977.04, the S&P 500 lost 9.63 points, or 0.46 percent, to 2,092.43, and the Nasdaq Composite dropped 7.73 points, or 0.15 percent, to 4,988.25.
A measure of equities in major markets was down 0.25 percent while the FTSEurofirst 300 index of top European shares ended up 0.1 percent, after last week's 3.7 percent jump. InJapan, Nikkei futures fell 0.9 percent.
FED FOCUS DRAGS EURO LOWER
The euro touched a four-week low on a renewed focus on the monetary policy differential between the United States and other major economies, with the Federal Reserve on track to raise U.S. interest rates for the first time in nearly a decade.
As the U.S. job market improves, the risk is receding that an unexpected setback will derail the economic recovery once the Federal Reserve raises rates, San Francisco Fed President John Williams told Reuters on Monday.
Recent commentary from Fed officials and minutes from the central bank's March policy meeting suggest a June rate hike is still possible.
"To some extent that possibility has been put back on the table, and that's part of what's driving the dollar higher," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington.
The euro was down 0.3 percent at $1.0573, having fallen as low as $1.0519. The dollar index, which measures the greenback against a basket of major currencies, rose 0.1 percent. The dollar dipped 0.1 percent against the yen.
Crude futures ended higher but were well below intraday peaks, supported by concerns about Iran and turmoil in Yemen, though the global supply glut continued to cap gains.
Brent May crude rose 6 cents to settle at $57.93 a barrel. U.S. crude rose 27 cents to settle at $51.91
Benchmark 10-year Treasury notes were last up 7/32 in price to yield 1.9298 percent, down from 1.953 percent late on Friday.
The stronger dollar and prospects of higher U.S. rates helped push gold to its largest daily drop in two weeks. It last traded at $1,198.76 an ounce, down 0.7 percent.
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