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Global equities fall after Fed keeps rates on hold, dollar up

Reuters  |  NEW YORK 

By Chuck Mikolajczak

NEW YORK (Reuters) - World equity markets declined on Thursday, snapping a seven-session winning streak, with U.S. stocks on the defensive and the dollar strengthening after the Federal Reserve kept interest rates unchanged.

held rates steady and said ongoing strong job gains and household spending had kept the on track. Its statement showed little change in the Fed's outlook for the since the Fed's previous meeting in September aside from noting that "business investment had moderated from its rapid pace earlier in the year."

U.S. shares extended losses after the statement, on the heels of Wednesday's post-election rally of more than 2 percent. Those gains came as investors celebrated political gridlock in the as Democrats took control of the after the midterm congressional vote, while Republicans maintained control of the

A spate of weak earnings also gave investors reason for pause, with one of the biggest drags on the benchmark index, down 8.2 percent as the loss of chip sales to caused the company to cut its fourth-quarter outlook.

"There are those people who are unsatisfied by this statement because they were looking for a more dovish tone after last month's market volatility," said Gene Tannuzzo, of fixed income at In

"That's why we see short-term yields ticked up and stocks down here. They are still on track."

The Dow Jones Industrial Average <.DJI> rose 11.12 points, or 0.04 percent, to 26,191.42, the <.SPX> lost 7.05 points, or 0.25 percent, to 2,806.84 and the <.IXIC> dropped 39.87 points, or 0.53 percent, to 7,530.89.

European shares closed higher, led by banking shares <.SX7P> following results from names such as and .

The pan-European 600 index <.STOXX> rose 0.19 percent and MSCI's gauge of stocks across the globe <.MIWD00000PUS> shed 0.28 percent.

The dollar had advanced heading into the statement and added to its gains after weakening in the prior session.

Traders currently see a 71.4 percent chance the will raise rates by a quarter percentage point at its December meeting, according to CME's FedWatch, up from 68.8 percent on Nov 1.

The dollar index <.DXY> rose 0.71 percent, with the euro down 0.58 percent to $1.1358.

fell and WTI entered a bear market, down more than 20 percent from its Oct 3 high, as crude surrendered early gains as investors focused on swelling global supply, which is increasing faster than many had expected.

U.S. crude settled down 1.62 percent at $60.67 a barrel and Brent last settled at $70.65, down 1.97 percent.

Benchmark 10-year notes last fell 8/32 in price to yield 3.241 percent, from 3.213 percent late on Wednesday.

(Additional reporting by and Richard Leong; Editing by and Tom Brown)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, November 09 2018. 02:54 IST