Published — Tuesday 29 January 2013
Last update 29 January 2013 5:18 am
NEW YORK: US stock indexes were under pressure, following the trend elsewhere in the world, though oil prices rose on strong US durable goods data and earnings results from Caterpillar.
Investor optimism got a small boost after rating agency Fitch scaled back the chance it will strip the US of its AAA status, saying a recent deal on the country’s debt limit
removed the near-term risk of a cut.
In commodity markets, Brent oil prices steadied near a three-month high at just over $ 113 a barrel before the Fed meeting on Tuesday and Wednesday and US employment data on Friday expected to show more signs of recovery in the world’s biggest oil consumer.
US light sweet crude oil rose 42 cents, or 0.44 percent, to $ 96.30 per barrel.
Prices for US Treasuries slid after a gauge of planned US business spending rose in December and investors pushed for price concessions ahead of a debt auction later in the day.
But there was wariness in anticipation of a series of significant US economic events this week, including the initial estimate of fourth-quarter GDP, the US Federal Reserve’s
first policy meeting of the year and January payrolls data.
“You can’t find more of a global bellwether than Cat, and people are pleased with the number, which suggests there could be less concern about slowing growth in China after this,” said Wayne Kaufman, chief market analyst at John Thomas Financial in New York.
The Dow Jones industrial average was down 0.23 points, or 0.00 percent, at 13,895.75. The Standard & Poor’s 500 Index was down 0.48 points, or 0.03 percent, at 1,502.48.
The Nasdaq Composite Index was up 11.62 points, or 0.37 percent, at 3,161.33.
“Markets don’t go up in a straight line,” said Garry Evans, global head of equity strategy at HSBC In London.
“I think that people are realizing there could still be problems out there.”
Adding to potential pitfalls ahead were signs from Washington that the $1.2 trillion in automatic spending cuts due to take effect by March 1 could go ahead, threatening a hit to confidence in the giant US economy.
Fitch said a downgrade was still likely later in the year if Washington failed to use the new breathing space to put in place a credible debt reduction plan.
A strong start to the earnings season has boosted US equities, with major averages rising for four straight weeks.
The S&P has gained for eight straight days, its longest winning streak in eight years.
But MSCI’s benchmark world share index was down 0.2 percent on Monday after a nearly 4.5 percent gain this month on signs of economic recovery in the US, stabilization in the euro zone and accelerating growth in China.
European stocks slipped 0.1 percent, with the broad FTSEurofirst 300 index of top company shares hovering just under a two-year high.
The market’s softer tone also followed a weaker session in Asia, where falls in technology companies caused MSCI’s broadest index of Asia-Pacific shares outside Japan to drop 0.5 percent.
Data from the European Central Bank gave another reminder that the recent surge in financial markets is not being matched in the real economy.
Lending by banks to euro zone companies, consumers and home buyers contracted in December for the eighth straight month as recessions across much of the region sap the appetite to borrow and banks’ willingness to lend.
“As of the end of 2012, there was no sign of improvement in credit flows,” said Marie Diron, an economist who works on Ernst & Young’s euro zone forecasts in London.
Data showing inflows to global equity funds slowed in the past week and comments from several major investment banks noting signs that the market may be reaching a natural top added to the caution.
US Treasury debt prices were lower. The benchmark 10-year US Treasury note was down 10/32, the yield at 1.9846 percent.
The euro was little changed against the dollar at $1.3457, though slipping from an 11-month high touched on Friday.
The prospects of a member country being forced to leave the euro zone have all but vanished since the middle of last year, a survey showed.
The dollar was down 0.2 percent against the yen after the US home sales data, though the Japanese currency is expected to remain weak on expectations Japan’s government will keep pushing for aggressive monetary easing, whereas the Fed’s view could change if the economic recovery strengthens.