same old / same old / same old............
Stocks Falter on Bets of U.S. Rate Rise
DOW JONES & COMPANY, INC. 9:14 AM ET 8/19/2016
Stocks slipped while the dollar strengthened Friday as investors raised their bets that the Federal Reserve may be on course to boost interest rates this year.
Futures pointed to a 0.3% opening loss for the S&P 500, following a 0.8% decline in the Stoxx Europe 600 and a mixed session in Asia.
Stocks had gained earlier in the week after minutes from the Fed's July meeting suggested officials were in no hurry to act. But those bets began to unwind after San Francisco Fed President John Williams said Thursday that the central bank should move to raise interest rates "sooner rather than later."
New York Fed President William Dudley also struck an upbeat note on the economy, noting "the strong jobs reports released over the past two months have helped allay concerns that arose earlier this year that job growth was beginning to stall."
Fed fund futures, used by investors to bet on interest rate policy rates, suggested a 53.5% probability of a rate increase by the end of the year, compared with a 46.9% chance the previous day, according to CME Group.
The prospect of higher U.S. interest rates tends to strengthen the dollar but weaken stock markets, which have been boosted for years by ultraloose monetary policy.
The WSJ Dollar Index, which measures the dollar against a basket of 16 currencies, was up 0.4%.
The stronger U.S. currency weighed on dollar-denominated commodity prices. Gold pulled back 1.1% to $1,342 an ounce.
Brent crude oil was down 0.6% at $50.58 a barrel after a six-session winning streak sent oil prices into a bull market on Thursday. Traders had drawn encouragement in recent sessions from falling U.S. stockpiles and talks of a production cap by the Organization of the Petroleum Exporting Countries.
Stocks in Europe fell, led lower by shares of banks and mining companies. Italian lenders fared among the worst, with shares of UniCredit down nearly 7%.
The yield on the 10-year Treasury note rose to 1.563% from 1.536% on Thursday. Yields move inversely to prices.
In Asian trade, Japan's Nikkei Stock Average rose 0.4% as the yen retreated slightly. The dollar was last up 0.2% against the yen at Yen100.2800.
Shares in Hong Kong ended 0.4% lower, giving back some of Thursday's gains, while Australia's S&P ASX 200 index inched up 0.3%, catching up with Thursday's rise in the oil price.
The Australian dollar fell 0.9% against the dollar, however, after Moody's warned about the outlook for the country's banks.
Stock market volatility has receded in recent sessions, even as summer holidays have kept trading volumes light. U.S. stocks are on track to end the week almost unchanged, as major bourses have bumped up against their all-time best levels.
Shares in Japan and Europe have fared worse since Monday, on track to lose 2.2% and 1.6%, respectively.
"Even though growth in the U.S. is pretty subpar, it's also pretty stable, and we can't say that about other areas," said Marie Schofield, portfolio manager and chief economist at Columbia Threadneedle Investments.
In Europe and Japan, "markets are juggling weak growth, unconventional monetary policy and the impact that is having on the financial sector," Ms. Schofield said. "Much depends on momentum, and much depends on central banks."
The Jackson Hole symposium, a monetary policy conference, may offer further clues for investors on the course of Fed policy, with Chairwoman Janet Yellen slated to speak next Friday.
Write to Riva Gold at riva.gold@wsj.com
(END) Dow Jones Newswires
08-19-160914ET
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