NEW YORK: Global equity markets eased yesterday as investors assessed the outlook for further gains after this year's rapid start, while the euro slipped ahead of a European Central Bank meeting that could reveal concerns about the currency's strength.
The ECB is widely forecast to keep rates at a record low 0.75 percent when it meets today, but the euro's strength may lead policymakers to examine whether the strong currency is undermining any recovery in troubled economies like Spain.
The S&P 500 has gained 6 percent so far this year, lifting the benchmark equity index to highs last seen in December 2007 but giving investors pause. The Dow briefly climbed above 14,000 for the first time in more than five years during the rally.
"You knew a correction was coming," said Gordon Charlop, managing director at Rosenblatt Securities in New York.
"The question was whether they were going to tease you and get it close and then start selling it off or get it up to 14,000 and then start to make a move to the sell side," he said.
The Dow Jones Industrial Average was down 29.76 points, or 0.21 percent, at 13,949.54. The Standard & Poor's 500 Index was down 2.34 points, or 0.15 percent, at 1,508.95. The Nasdaq Composite Index was down 6.39 points, or 0.20 percent, at 3,165.20.
European equities extended losses in afternoon trading, weighed down by a string of disappointing earnings results, while signs of disagreement between Germany and France over the exchange rate for the euro dented sentiment.
The FTSEurofirst 300 was down 0.37 percent at 1,150.18. MSCI's all-country world equity index fell 0.02 percent to 354.91.
After France complained about the euro's level, German Chancellor Angela Merkel's spokesman said the currency was not over-valued and that competitiveness could not be achieved via exchange rates.
Against the dollar, the euro was 0.4 percent lower at $ 1.3524.
Japan's yen, at the center of concerns that some countries are trying to devalue their currencies to boost growth, hit a near-three-year low earlier in the day on the view a new Bank of Japan Gov. will ease policy aggressively once in office.
The yen fell 0.16 percent to 93.46.
Brent crude oil futures fell, pressured by ample supply and worries about the euro.
Brent futures fell 42 cents to $ 116.10 a barrel. US light sweet crude oil fell 1.0 percent to $95.67 a barrel.
US government debt prices rose on weaker stocks, while nagging worries about possible political shake-ups in Italy and Spain also rekindled demand for safe-haven bonds.
The benchmark 10-year US Treasury note was up 6/32 in price to yield 1.9837 percent.