New York - A global gauge of equities dipped but continued to brush against its record high on Monday after strong Chinese factory data, while soft data out of Europe heightened expectations for action from the European Central Bank, pressuring the euro.
Slower-than-expected manufacturing growth in the euro zone piled pressure on the ECB to act aggressively when it meets on
Thursday, keeping the euro at a near four-month low versus the US dollar, though weak US data gave the single currency some respite.
The relative strength in the greenback weighed on oil prices, but copper jumped as China's manufacturing activity expanded at the fastest pace in five months in May, raising expectations of an increase in demand.
US stocks ticked down after growth in the US manufacturing sector came in at a slightly slower than expected pace.
Concerns remain over the strength of the rally to historic highs on the S&P 500 and Dow industrials, set last Friday.
“It is disconcerting that stocks have been doing so well while they have such low volume and data isn't showing the kind of growth we want,” said Brian Battle, director of trading at Performance Trust Capital Partners in Chicago.
“While there aren't other places for investors to go that look attractive, stocks seem high at these levels.”
The Dow Jones industrial average fell 11.59 points, or 0.07 percent, to 16,705.58, the S&P 500 lost 4.25 points or 0.22 percent, to 1,919.32 and the Nasdaq Composite dropped 19.77 points or 0.47 percent, to 4,222.85.
Despite the slip on Wall Street, stable European shares and a 2.1 percent jump in Tokyo's Nikkei lifted MSCI's world index to a fresh intraday high of 6-1/2 years and about 1.5 percent away from a record.
The euro fell 0.1 percent to hit $1.3614, while earlier dipping below $1.36, not far from a near four-month low of $1.3586 touched on Thursday.
Extra pressure for the ECB to act aggressively came from German annual inflation data, which showed a slowdown to its weakest rate in nearly four years in May.
“With market participants unwilling to be brave enough to take against-consensus euro long positions ahead of the (ECB)meeting, and the potential for an upside surprise in US data, we expect euro/dollar to remain under pressure,” ING currency strategist Petr Krpata said.
The greenback was broadly stronger.
It rose 0.4 percent to 102.12 yen and a gauge against a basket of currencies rose 0.2 percent.
The China factory reading lifted base metals on higher demand prospects.
Three-month copper on the London Metal Exchange climbed 1 percent to $6,915 a tonne.
The metal gained 3.1 percent in May, its first monthly advance since December.
With risk appetite strong, safe-haven gold slid for a fifth straight session.
Spot gold was at $1,246 an ounce, not far from the four-month low of $1,241.99 hit on Friday.
Oil also slipped as the stronger dollar weighed. - Reuters