NEW YORK (Reuters) - Global stocks held on to recent gains and U.S. Treasuries prices rose on Monday as expectations of further stimulus from top central banks gave support to markets, while oil was volatile on concerns over a tropical storm in the Gulf of Mexico.
The S&P 500 was flat but the Nasdaq Composite edged up, led by gains in Apple (AAPL.O), which hit a record closing high of $675.68 after a patent court win on Friday over South Korea’s Samsung Electronics (005930.KS). Samsung shares lost 7.45 percent during the Seoul session.
Investors are looking ahead to a meeting of central bankers at Jackson Hole, Wyoming, on Friday for clarity on what the Federal Reserve will do to stimulate the economy and how the European Central Bank will tackle the bloc’s credit crisis.
“We are expecting a little bit of pickup on the buy side as shorts possibly cover positions anticipating a surprise from (Fed Chairman Ben) Bernanke and the Jackson Hole meeting,” said Fred Dickson, chief market strategist at D.A. Davidson & Co in Lake Oswego, Oregon.
“It looks like it is just going to be very, very quiet up to that point, with a little bit of reaction possibly if we get some surprise economic headlines.”
Composite daily volume in U.S. equities was the lowest so far this year and a holiday in the UK kept trading light in Europe as well.
The Dow Jones industrial average .DJI fell 33.30 points, or 0.25 percent, to 13,124.67. The S&P 500 Index .SPX shed 0.69 point, or 0.05 percent, to 1,410.44. The Nasdaq Composite .IXIC edged up 3.40 points, or 0.11 percent, to 3,073.19.
A gauge of world equities .WORLD was flat while the pan-European FTSE 300 .FTEU3 stock index closed up 0.5 percent. U.S. dollar-denominated Nikkei futures were also flat.
U.S. crude settled 0.7 percent lower at $95.47 a barrel, while Brent dropped 1.2 percent to settle at $112.26. Tropical storm Isaac approached the Gulf of Mexico and traders assessed the prospect of lower crude oil use by temporarily closed U.S. refineries.
“Traders realize that there is more refining capacity at risk from this storm, and that the risk is also to oil consumption,” said analyst Tim Evans at Citi Futures Perspective in New York. “It is similar to the price action we had ahead of Hurricane Katrina.”
The euro dipped against the U.S. dollar in late trading after a bigger-than-expected drop in German business sentiment, even as the survey raised hopes the euro zone’s largest economy will do more to revive the bloc’s growth.
The euro fell 0.1 percent to $1.2496, not far from a seven-week peak of $1.2589 set last Thursday.
“The news clearly shows that Germany cannot escape unharmed if the rest of the euro zone falls into a deep recession,” said Boris Schlossberg, managing director of FX Strategy at BK Asset Management in New York.
“Therefore policymakers may now temper their insistence on austerity and instead will pursue more stimulative policies in order to revive growth.”
This view got a boost on Monday from Chicago Federal Reserve Bank President Charles Evans, who said in a speech in Hong Kong that the Fed should start a new round of monetary stimulus immediately, buying bonds for as long as it takes to produce a steady decline in the jobless rate.
The possibility of more bond buying from the Fed lifted prices of U.S. Treasuries.
The benchmark 10-year U.S. Treasury note was up 10/32, with the yield at 1.6506 percent.
European Central Bank chief Mario Draghi signaled earlier this month that the bank may start buying government debt to reduce crippling Spanish and Italian borrowing costs, comments that fueled a broad-based upturn in sentiment on global markets.
However, over the weekend Bundesbank chief Jens Weidmann likened the ECB’s bond-buying plans to a dangerous drug, pointing to growing unease over the policy.
Gold prices hit their highest since mid-April on bets of more Fed easing, but then steadied on caution ahead of the Jackson Hole meeting. Gold last traded around $1,664 an ounce.
Additional reporting by Wanfeng Zhou, David Sheppard and Chuck Mikolajczak; editing by Dan Grebler and James Dalgleish