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Stocks Fall in Light Trading; Bonds, Dollar Drop: Markets Wrap

Randall Jensen and Claire Ballentine
Stocks Fall in Light Trading; Bonds, Dollar Drop: Markets Wrap

(Bloomberg) -- U.S. stocks fell in light trading on the penultimate day of a blockbuster year for markets. Treasuries and the dollar declined.

The S&P 500 fell the most in more than three weeks amid the countdown to the New Year’s Day holiday Wednesday. Tech shares paced losses, with Facebook Inc., Amazon.com Inc. and Google’s parent company among the biggest decliners. The benchmark is still headed for its best year since 2013.

Ten-year Treasury yields pared earlier gains to trade around 1.88%, while the dollar fell for a third straight session as the yen and the pound strengthened.

“This whole week’s going to be slow, so I wouldn’t attribute any day’s movements or any movements this week to anything in particular,” said Jeff Mills, chief investment officer at Bryn Mawr Trust. “The market is in an interesting spot, we’ve run up quite a bit, technically the market is overbought.”

Investors are acting with caution in thin pre-holiday trading at the end of a year that’s propelled global equity benchmarks to record highs. And with the Federal Reserve apparently on hold and U.S. trade trade talks seemingly far from a new breakthrough, traders may remain reluctant to jump back into risk markets.

Elsewhere, West Texas crude turned lower following a report that Iran detained a fuel tanker.

Here are some events to watch for this week:

China’s official manufacturing PMI is due Tuesday, and the Caixin version comes Thursday.Most global markets will be closed on Jan. 1. U.S. fixed-income markets also close early at 2 p.m. EST Tuesday.World leaders including China’s Xi Jinping and North Korea’s Kim Jong Un are set to deliver New Year addresses.Federal Open Market Committee minutes will be released on Friday.U.S. ISM manufacturing is also due Friday. The Institute for Supply Management’s PMI is forecast to show a contraction for a fifth straight month.

These are some of the moves in major markets:

Stocks

The S&P 500 Index fell 0.6%, the most since Dec. 3, as of 4 p.m. New York time.The Stoxx Europe 600 Index declined 0.9%.The MSCI Asia Pacific Index was little changed.

Currencies

The Bloomberg Dollar Spot Index dipped 0.2%.The British pound rose 0.3%.The euro climbed 0.2% to $1.1203.The Japanese yen strengthened 0.6% to 108.82 per dollar.

Bonds

The yield on 10-year Treasuries rose two basis points to 1.90%.Germany’s 10-year yield climbed seven basis points to -0.19%.Britain’s 10-year yield jumped 11 basis points to 0.867%.

Commodities

West Texas Intermediate crude fell 0.3% to $61.54 a barrel.Gold climbed 0.3% to $1,515.45 an ounce.

(An earlier version of this story was corrected to reflect that today is Monday, not Friday, in first paragraph.)

--With assistance from Christopher Anstey, Andreea Papuc and Todd White.

To contact the reporters on this story: Randall Jensen in New York at rjensen18@bloomberg.net;Claire Ballentine in New York at cballentine@bloomberg.net

To contact the editors responsible for this story: Christopher Anstey at canstey@bloomberg.net, Natasha Doff

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