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GLOBAL MARKETS-Stocks fall around globe; U.S. Treasuries rise
April 7, 2014 / 4:26 PM / in 4 years

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

* Equities back further away from highs

* Dollar slips after ECB policymaker comments

* Oil prices off 1 percent (Adds Wall Street stocks drop, Treasury gains; changes dateline, previous LONDON)

By Michael Connor

NEW YORK, April 7 (Reuters) - Wall Street stocks sank 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 for more stimulus and boosted the euro against the greenback.

The S&P 500 index of large-cap U.S. companies was on track for a third straight decline as biotech and consumer companies extended recent losses. On Friday, the Nasdaq and S&P indices suffered their worst drop since February.

The S&P 500 lost 18.17 points, or 0.97 percent, to 1,846.92, while the Dow Jones industrial average fell 136.92 points, or 0.83 percent, to 16,275.79 and the Nasdaq Composite dropped 53.512 points, or 1.3 percent, to 4,074.213.

Pfizer Inc, down 2.8 percent at $31.26, added pressure to the Dow and S&P 500. Pfizer’s experimental breast cancer drug nearly doubled the amount of time patients lived without their disease getting worse in a clinical trial. But overall survival was not shown to be statistically significant, researchers said.

The Nasdaq on Friday recorded its biggest decline since February as investors extended a recent sell-off in high-flying and high-growth shares, mostly in the tech and biotech sectors, on fears they are over-valued. The negative sentiment spilled into Asia on Monday, hitting Japanese tech stocks.

Japan’s Nikkei fell 1.7 percent, while the FTSEurofirst 300 index of top European shares was down 1.2 percent at 1,336.11, down from a 5 1/2-year high 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.

The MSCI world equity index was down 0.81 percent, having hit levels not seen since late 2007 on Friday.

U.S. Treasuries prices rose, extending last week’s gains as traders reduced bets the Federal Reserve might increase 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 10/32 in price to yield 2.6881 percent, while the five-year note US5YT=RR was 6/32 higher, yielding 1.666 percent.

The dollar was down by 0.27 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 below $106 a barrel, 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. (Reporting by Michael Connor; Additional reporting by Sam Forgione and Richard Leong; Editing by Dan Grebler)

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