By Stephen Culp
NEW YORK (Reuters) -Wall Street stocks struggled to follow their European counterparts higher on Monday after mixed economic data and ahead of talks between U.S. President Donald Trump and Russian President Vladimir Putin aimed at ending the Ukraine war.
Over the weekend, U.S. strikes against Yemen’s Houthi movement threatened to escalate tensions in the oil-rich Middle East, driving crude prices higher on supply fears.
The S&P 500 and the Dow clung to modest gains, while the tech-heavy Nasdaq sank into negative territory in early trading.
Weaker-than-expected U.S. retail sales data was at least partially attributable to cheaper gasoline; a solid rebound in online receipts and an upside surprise in the core measure showed underlying consumer strength.
“Investors are looking for any type of positive bullish catalyst in this environment when uncertainty is so elevated,” said Adam Sarhan, chief executive at 50 Park Investments in New York. “Any news or data that is not the-end-of-the-world kind of data is being received well.”
“The consumer makes up two-thirds of the economy or thereabouts,” Sarhan added. “So any news that retail sales or the consumer is not about to fall off of a cliff is considered good news especially in this environment since we’re so oversold.”
The U.S. Federal Reserve and other central banks are expected to convene for policy meetings this week, but are largely expected to keep to the sidelines until the ramifications of Trump’s multi-front tariff war can be further assessed.
The Dow Jones Industrial Average rose 187.85 points, or 0.45%, to 41,676.04, the S&P 500 rose 16.08 points, or 0.27%, to 5,654.28 and the Nasdaq Composite fell 30.56 points, or 0.17%, to 17,723.53.
European shares extended their rally with an assist from energy and health stocks as Germany’s debt reform plans helped to boost confidence that Europe’s largest economy will increase spending and kick-start growth.
European stocks have handily outperformed their global counterparts so far this year.
The pan-European STOXX 600 index rose 0.74%, while Europe’s broad FTSEurofirst 300 index rose 16.44 points, or 0.76%.
MSCI’s gauge of stocks across the globe rose 4.47 points, or 0.53%, to 840.61.
Emerging market stocks rose 10.86 points, or 0.97%, to 1,130.47. MSCI’s broadest index of Asia-Pacific shares outside Japan closed higher by 1.07%, to 587.92, while Japan’s Nikkei rose 343.42 points, or 0.93%, to 37,396.52.
The U.S. Treasury yield curve flattened amid mixed retail sales data, while shorter-dated yields rose on worries that the U.S. economy will soften while the Fed holds its restrictive policy rate steady.
The yield on benchmark U.S. 10-year notes fell 1.9 basis points to 4.289%, from 4.308% late on Friday.The 30-year bond yield fell 3.1 basis points to 4.5842% from 4.615% late on Friday.
The two-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 1.6 basis points to 4.032%, from 4.015% late on Friday.
The dollar hovered near a five-month low as uncertainties arising from Trump’s trade policies weakened the greenback as other currencies, including the euro, benefited from domestic drivers.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro,fell 0.25% to 103.47, with the euro up 0.27% at $1.0908.
Against the Japanese yen, the dollar strengthened 0.01% to 148.64.
The Mexican peso < MXN=> strengthened 0.3% versus the dollar at 19.878.
The Canadian dollar strengthened 0.34% versus the greenback to C$1.43 per dollar.
Crude oil prices were supported by supply concerns arising from the U.S. vow to continue its attacks targeting Iran-aligned Houthis in Yemen, while encouraging economic data from China supported the demand side of the coin.
U.S. crude rose 0.86% to $67.76 a barrel and Brent rose to $71.18 per barrel, up 0.85% on the day.
Gold gained ground but held below the $3,000 level it breached for the first time last week ahead of this week’s rate decision from the Federal Reserve.
Spot gold rose 0.44% to $2,997.67 an ounce. U.S. gold futures rose 0.23% to $3,001.50 an ounce.
(Reporting by Stephen Culp; Additional reporting by Caroline Valetkevitch in New York; Amanda Cooper in London; Editing by Sharon Singleton)
