(Updates prices, adds commentary,)
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Dollar rises after data shows retail sales advance
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Shares fall while Treasury yields rise
By Sinéad Carew
NEW YORK, Feb 15 (Reuters) – The S&P 500 gave up earlier losses on Wednesday while the dollar was rising along with U.S. Treasury yields after data showed U.S. retail sales in January increased by the most in nearly two years, prompting concerns about continued interest rate hikes.
After two straight monthly declines, the Commerce Department said retail sales surged 3.0% last month, in the largest increase since March 2021, after declining by an unrevised 1.1% in December.
Paired with Tuesday’s data, which showed a monthly inflation pick-up in January, evidence of an increase in consumer spending fueled worries the Fed would need to keep increasing rates for longer than some investors had hoped to tame inflation.
“It’s all about the Fed. As figures like retail sales come out quite strong, this is more food for the Fed to keep raising rates, maybe at reduced pace, but, at the very least, to keep them higher for longer,” said Bruce Zaro, managing director at Granite Wealth Management.
The Dow Jones Industrial Average fell 79.56 points, or 0.23%, to 34,009.71, the S&P 500 lost 2.26 points, or 0.05%, to 4,133.87 and the Nasdaq Composite added 64.76 points, or 0.54%, to 12,024.90.
The pan-European STOXX 600 index had closed up 0.42% and MSCI’s gauge of stocks across the globe shed 0.19%.
Emerging market stocks lost 1.02%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 1.55% lower, while Japan’s Nikkei lost 0.37%.
The dollar index hit its highest level since Jan. 6 after the hotter-than-expected U.S. retail sales data and stubbornly high inflation.
The index, which measures the greenback against a basket of major currencies, was last up 0.63%, with the euro down 0.5% at $1.0681.
The yen weakened 0.77% versus the greenback to 134.14, while sterling was last trading at $1.2023, down 1.21% on the day.
In U.S.
Treasuries
, benchmark 10-year note yields were up 4.8 basis points at 3.809%, from 3.761% late on Tuesday. The 30-year bond was last up 5.3 bpd to yield 3.8537%, from 3.801%. The 2-year note was last was up 0.5 bps to yield 4.6266%, from 4.622%.
Oil prices finished lower but gave up most of their earlier losses as the market discounted a build in U.S. crude stocks due to a data adjustment, while forecasts for higher global demand were supportive.
U.S. crude settled down 0.59% at $78.59 per barrel and Brent finished at $85.38, down 0.23% on the day.
Gold prices hit their lowest since early January with pressure from the stronger dollar and better-than-expected U.S. economic data.
Spot gold was down 1.0% at $1,835.56 an ounce. U.S. gold futures fell 1.06% to $1,834.20 an ounce.
(Reporting by Sinéad Carew in New York, Lucia Mutikani in Washington, Marc Jones in London, Xie Yu in Hong Kong and Alex Lawler in London; Editing by Kim Coghill, John Stonestreet, David Gregorio and Nick Macfie)
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