S&P 500 slips, but losses kept in check as Nvidia climbs ahead of results
* MSCI world equity index modestly lower
* Dollar slips as Jackson Hole meeting gets underway
* U.S. factory sector contracts for first time in a decade
Markit
(Updates to close of European trading)
By Saqib Iqbal Ahmed
NEW YORK, Aug 22 (Reuters) - An index of stock markets
worldwide edged lower on Thursday on uncertainty over the
outlook for U.S. interest rate cuts and weak U.S. manufacturing
data that raised concerns about the health of the world's
largest economy.
U.S. manufacturing industries recorded their first month of
contraction in almost a decade amid concerns about whether the
U.S.-China trade conflict would tip the economy into a
recession, a private survey showed. "Manufacturing has been pretty weak across the globe for a
while now and we are starting to see that bleed into the U.S.,"
said Joe Mallen, chief investment officer at Helios Quantitative
Research.
Investors' focus, however, remained firmly on Friday's
speech by Federal Reserve Chair Jerome Powell at a Jackson Hole,
Wyoming, event, which could offer clarity on the direction of
U.S. monetary policy.
The Fed has come under increasing pressure to cut borrowing
costs more, including a call by President Donald Trump on
Wednesday for the central bank to reduce its benchmark rate.
The MSCI world equity index .MIWD00000PUS , which tracks
shares in 47 countries, was down 0.2%.
On Wall Street, stocks were little-changed in a choppy
session. While strong results from retailers bolstered
confidence in consumer demand and lifted shares, the
manufacturing data and comments from Fed officials dampening
hopes of future interest rate cuts hurt risk sentiment.
The Dow Jones Industrial Average .DJI was the strongest of
the three U.S. major stock indexes, helped by a 4.52% jump in
Boeing's BA.N shares after a Reuters report that the company
has told suppliers it will resume production of its best-selling
737 jets at a rate of 52 aircraft per month in February 2020.
The Dow rose 69.51 points, or 0.27%, to 26,272.24, the S&P
500 .SPX gained 0.2 points, or 0.01%, to 2,924.63 and the
Nasdaq Composite .IXIC dropped 23.91 points, or 0.31%, to
7,996.30. European shares, which found support from upbeat surveys on
Germany and the euro zone, declined on a report that the
Bundesbank sees no need for German fiscal stimulus right now.
The pan-European STOXX 600 index .STOXX closed
down 0.40%.
In currency markets, the U.S. dollar weakened as investors
braced for a possible announcement or statement from the Jackson
Hole meeting.
While the Fed's latest minutes showed U.S. policymakers are
reluctant to begin a big rate-cutting cycle in the coming
months, market participants still expect the Fed to signal a
stimulus measure, or an affirmation that the U.S. central bank
is on a steady path to ease interest rates, a scenario viewed as
negative for the dollar.
"Jackson Hole is going to provide an opportunity for the Fed
to correct that communication mistake in the minutes," said
Edward Moya, senior market analyst at OANDA in New York.
The dollar slipped 0.15% against a basket of other major
currencies to 98.144. .DXY
Asian currencies suffered after the Chinese yuan fell to an
11-year low against the dollar, indicating trade tension between
the world's two biggest economies remained a major issue.
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Treasury yields, which climbed after better-than-expected
manufacturing data in Europe boosted risk sentiment, pared gains
following the U.S. manufacturing data.
Benchmark 10-year notes US10T=RR were down 6/32 in price
to yield 1.5978%, up from 1.577% late on Wednesday.
Oil prices weakened as worries about the global economy
weighed. Brent crude LCOc1 fell 0.14 cents to $60.16 a barrel,
while U.S. West Texas Intermediate crude CLc1 fell 0.09 cents
to $55.59.
Gold prices were slightly lower as investors awaited the
outcome of the Jackson Hole meeting. Spot gold XAU= dropped
0.13% to $1,499.9871 an ounce.
Composite Euro area PMIs rise https://tmsnrt.rs/2Z9i5mz
Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
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