(Recasts to add drop in U.S. stocks, comments, updates trading)
By Barani Krishnan
NEW YORK, June 24 U.S. stocks turned lower on
Tuesday after stronger-than-expected data lifted them to a fresh
record earlier in the day, while the sterling tumbled after the
Bank of England governor said spare capacity would need to be
used up before a rate rise is needed.
The dollar and U.S. Treasuries prices gained, but flagging
business morale in Germany pulled European stocks lower.
The S&P 500 fell after eking out its fourth record high in
five sessions earlier Tuesday. It was boosted by data showing
U.S. consumer confidence rose more than expected in June, as did
May new home sales.
"The market obviously responded well to the good economic
data earlier - the housing data and of course the consumer
confidence," said Peter Cardillo, chief market economist at
Rockwell Global Capital in New York.
"But the market is basically in a standstill here. I kind of
suspect this is what we are going to see as the quarter comes to
The Dow Jones industrial average fell 54.4 points or
0.32 percent, to 16,882.86, the S&P 500 lost 2.68 points
or 0.14 percent, to 1,959.93 and the Nasdaq Composite
added 12.75 points or 0.29 percent, to 4,381.43.
Biotech shares helped buoy the Nasdaq, sparked by a 40.3
percent gain in Vertex Pharmaceuticals Inc to $93.48 in
heavy volume. The Nasdaq Biotech index climbed 1.7
U.S. Treasury bonds rose, pushing the 10-year benchmark
yield down almost two basis points to 2.60 percent.
Germany's Ifo index of business sentiment eased more than
expected in June to its lowest level this year.
"You are seeing economic statistics in Europe that are
disappointing," said Francois Savary, chief investment officer
at Swiss bank Reyl.
The FTSEurofirst 300 index of leading shares
settled down 0.1 percent, and the MSCI world stocks indicator
was little changed.
Sterling fell below $1.70, retreating from recent 5-year
peaks after Bank of England Governor Mark Carney said there was
little wage or inflationary pressure in the British economy, and
spare capacity would need to be absorbed before rates could be
Sterling was last down 0.3 percent at $1.6977, having
earlier fallen more than half a cent to as low as $1.6971.
The euro was little changed at $1.3595. The dollar
index was up 0.1 percent at 80.361, well within the
narrow 80.000-81.000 range seen since May.
In commodities trading, gold hit a more than 2-month
high at $1,325.90 an ounce, up 5.5 percent for June. Silver hit
a 3-month high at $21.22 an ounce.
Brent crude was up 0.3 percent at $114.46 a barrel,
supported by the fighting in Iraq, supply disruption in Libya
and expectations of a decline in U.S. crude inventories.
U.S. crude slipped 0.3 percent to $105.83.
(Additional reporting by Jamie McGeever in London; Editing by
Dan Grebler and Bernadette Baum)