* U.S. stocks down in late morning trading
* Dollar edges higher vs euro
* Oil prices down sharply
NEW YORK, June 20 (Reuters) –
Global stock indexes fell and the dollar inched up against
the euro on Tuesday as investors weighed the U.S. interest rate
outlook following news that housing starts rose.
U.S. Treasury yields traded lower in a narrow range.
Investors also were digesting China’s move to cut its
benchmark loan prime rates (LPR) for the first time in 10 months
on Tuesday. Among Beijing’s moves to stimulate the country’s
slowing recovery, the People’s Bank of China lowered the
medium-term lending facility rate on Thursday.
Groundbreaking on U.S. single-family homebuilding
projects
surged in May
by the most in more than three decades and permits for
future construction also rose, the report showed.
After lifting rates by 5 percentage points since March
2022, the Federal Reserve this month took a breather to assess
the effects of its actions. Rate hikes could resume next month,
however, with inflation still too high.
The Dow Jones Industrial Average led declines among the
major U.S. stock indexes at midday, and all of the 11 major S&P
500 sectors were lower.
The Dow
fell 306.37 points, or 0.89%,
to
33,992.75
; the S&P 500
lost 33.82 points, or 0.77%,
at
4,375.77
; and the Nasdaq Composite
dropped 96.68 points, or 0.71%,
to
13,592.89
.
U.S. markets were closed for a public holiday on Monday.
The pan-European STOXX 600 index
lost 0.51
% and MSCI’s gauge of stocks across the globe
shed 0.75
%.
Against a
basket of six
major currencies, the dollar was up 0.22% on the
day, with the euro
down 0.14% to
$
1.0907
.
Investors were also anxious to hear from Fed Chair
Jerome Powell, who is due to testify before the U.S. House of
Representatives’ Financial Affairs Committee on Wednesday.
“If Mr. Powell remains adamant that the central bank is
not done raising interest rates to crush inflation, that could
help the dollar stabilize after the big declines we saw last
week,” said Joe Manimbo, senior market analyst at Convera.
The Australian dollar fell after its latest
central bank meeting minutes showed that keeping interest rates
unchanged had been under consideration.
In Treasuries, the yield on 10-year notes
was down 6 basis points (bps) at 3.709%.
Oil prices fell sharply following a mixed demand outlook
from China.
U.S. crude recently
fell 1.81% to
$
70.48
per barrel and Brent was at $
75.32
,
down 1.01%
on the day.
Spot gold
dropped 0.7
% to $
1,935.79
an ounce.
(Reporting by Caroline Valetkevitch; additional reporting by
Saqib Iqbal Ahmed in New York, Joice Alves in London, Selena Li
in Hong Kong and Anisha Sircar in Bengaluru; editing by Susan
Fenton, Jason Neely and Richard Chang)
