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GLOBAL MARKETS-Stocks sag around globe; U.S. Treasuries rise
April 7, 2014 / 5:51 PM / 3 years ago

GLOBAL MARKETS-Stocks sag around globe; U.S. Treasuries rise

* U.S. stock decline accelerates

* Key Wall Street indices off close to 1 percent

* Dollar slips after ECB policymaker comments

* Oil prices off 1 percent (Updates Wall Street prices, adds gold decline, quotes)

By Michael Connor

NEW YORK, April 7 (Reuters) - Wall Street stocks fell 1 percent on Monday, joining a broad retreat in global equities markets from a six-year high touched last week, while U.S. Treasuries’ yields moved lower.

The dollar fell against major currencies as comments from European Central Bank policymakers curbed expectations of more euro zone economic stimulus and boosted the euro against the greenback.

On Wall Street, losses accelerated and the S&P 500 index of large-cap U.S. companies was on track for a third straight decline and what may be its biggest three-day drop in two months. On Friday, the Nasdaq and S&P indices suffered their worst drop since February.

The Dow Jones industrial average was down 147.68 points or 0.9 percent, at 16,265.03, the S&P 500 lost 19.5 points or 1.05 percent, to 1,845.59 and the Nasdaq Composite dropped 56.667 points or 1.37 percent, to 4,071.058.

Some investors worried that the declines may run on, even as U.S. momentum shares hit hard last week steadied. Prices of momentum shares, or stocks in fast-growing industries, surged in recent weeks.

“The big concern is the overall underlying weakness in so many different stocks,” said Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research in Cincinnati, Ohio. “The picture isn’t nearly as pretty when you look under the hood, and you see various sectors have clearly broken down, and now it’s starting to pull down on the whole entire stock market.”

Pfizer Inc, down 3.2 percent at $31.13, added pressure on the Dow and S&P 500. Pfizer’s experimental breast cancer drug nearly doubled the time patients lived without their disease getting worse in a clinical trial. But overall survival was not shown to be statistically significant, researchers said.

Earlier in the global trading day, Japan’s Nikkei fell 1.7 percent, while the FTSEurofirst 300 index of top European shares gave up 1.2 percent at 1,336.11, down from a 5 1/2-year high on Friday.

Britain’s top equity index, the blue-chip FTSE 100 index , had its biggest one-day decline in a month, retreating from a three-week high as a drop by house builders weighed on the market.

The broader FTSEurofirst measure of 300 European stocks fell 1.25 percent.

The MSCI world equity index was down 0.91 percent, having hit levels not seen since late 2007 on Friday.

World equity markets had enjoyed three straight weeks of gains as easing tensions in the Crimea region of Ukraine encouraged investors to add risks.

“Markets are overbought over the short term. We have seen a decent run after the Crimean situation cool down a little bit and now it’s quite natural to see a breather from that level,” said Gerhard Schwarz, head of equity strategy at Baader Bank.

U.S. Treasuries prices rose, extending last week’s gains as traders reduced bets the Federal Reserve might raise interest rates in the first half of 2015 after a March jobs report that missed some traders’ expectations. The selloff in Wall Street shares also supported demand for U.S. government debt.

“After this latest payrolls number, people reached the conclusion they were too ambitious with the Fed’s first rate hike,” said Mike Lorizio, head of Treasuries trading at John Hancock Asset Management in Boston.

Benchmark 10-year Treasuries were up 8/32 in price to yield 2.6935 percent, while the five-year note US5YT=RR was 6/32 higher, yielding 1.666 percent.

The dollar lost 0.24 percent against a basket of six major currencies. The euro rose 0.3 percent to $1.3742.

Comments from ECB policymakers Ewald Nowotny and Yves Mersch on Monday suggested more monetary easing from the central bank was not imminent, which lifted the euro against the dollar.

Nowotny said there was no need to act immediately to counter euro zone disinflation, while Mersch said that while the central bank was drawing up plans for large-scale asset purchases, it remained some way off

“The disappointment in the jobs data on Friday has soured sentiment” toward the dollar, said David Gilmore, a partner at Foreign Exchange Analytics in Essex, Connecticut

Brent crude oil fell well below $106 a barrel to $105.34, snapping a two-day rise and falling more than 1 percent, after Libyan rebels occupying four eastern oil ports agreed to end an eight-month blockade, raising the prospect of increased supply to world markets.

Gold was off, with some investors taking profits after a run-up of 1 percent on Friday credited to a short-covering rally by investors who had worried U.S. jobs data would top forecasts. Spot gold was down 0.45 percent at $1,298.30 an ounce in early afternoon New York trading. (Reporting by Michael Connor; Additional reporting by Sam Forgione, Richard Leong and Chuck Mikolacjzak; Editing by Dan Grebler)

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