NEW YORK Feb 15 (Reuters) –
Wall Street shares slipped on Wednesday while the dollar was rising along with US Treasury yields after data showed U.S. retail sales in January increased by the most in nearly two years, prompting concerns about Federal Reserve rate hikes.
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After two straight monthly declines, the Commerce Department said
retail sales
surged 3.0% last month, the largest increase since March 2021, after declining by an unrevised 1.1% in December.
After a monthly inflation pick up in January, an increase in consumer spending fueled worries the Fed would continue increasing interest rates for longer to cool the economy.
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“Although resilient consumer spending is a positive sign for the health of the economy, renewed demand for supply-constrained categories could add to inflation pressures, potentially eliciting more aggressive action from the Fed,” said Kayla Bruun, economic analyst at decision intelligence company Morning Consult.
The Dow Jones Industrial Average fell 169.43 points, or 0.5%, to 33,919.84, the S&P 500 lost 20.75 points, or 0.50%, to 4,115.38 and the Nasdaq Composite dropped 43.01 points, or 0.36%, to 11,917.13.
The pan-European STOXX 600 index rose 0.35% and MSCI’s gauge of stocks across the globe shed 0.59%.
Emerging market stocks lost 1.18%. MSCI’s broadest index of Asia-Pacific shares outside Japan closed 1.71% lower, while Japan’s Nikkei lost 0.37%.
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The dollar index hit its highest level since Jan. 6 after the hotter-than-expected U.S. retail sales data and stubbornly high inflation.
The index, which compares the greenback to a basket of major currencies, rose 0.775%, with the euro down 0.65% to $1.0665.
The Japanese yen weakened 0.87% versus the greenback at 134.27 per dollar, while Sterling was last trading at $1.1995, down 1.44% on the day.
In U.S.
Treasuries
, benchmark 10-year notes were up 3.6 basis points to 3.797%, from 3.761% late on Tuesday. The 30-year bond was last up 3.6 basis points to yield 3.8374%, from 3.801%. The 2-year note was last was down 0.4 basis points to yield 4.6182%, from 4.622%.
Oil prices dropped for a second day on signs of ample U.S. supplies and expectations of further interest rate hikes, though forecasts of higher 2023 demand growth and a potentially tighter market limited losses.
U.S. crude recently fell 1.19% to $78.12 per barrel and Brent was at $84.65, down 1.09% on the day.
Spot gold dropped 1.2% to $1,832.26 an ounce. U.S. gold futures fell 1.04% to $1,834.70 an ounce.
(Reporting by Sinéad Carew in New York, Lucia Mutikani in Washington, Marc Jones in London, Xie Yu in Hong Kong and Alex Lawler in London; Editing by Kim Coghill, John Stonestreet and David Gregorio)
