By Riva Gold
Stocks and the dollar rowed back from recent gains Monday, while oil prices fluctuated ahead of a critical meeting of the Organization of the Petroleum Exporting Countries.
Futures pointed to a 0.3% opening loss for the S&P 500, after the Dow Jones Industrial Average, S&P 500, Nasdaq Composite and Russell 2000 closed on Friday at record highs in the lowest volume trading session of the year.
The Stoxx Europe 600 was down 0.8% midday, with the oil and gas sector among the steepest decliners as oil prices swung wildly ahead of a meeting of major oil producers.
Brent crude oil was last down 0.7% at $47.89 a barrel in choppy trade after falling to as low as $47.41 earlier in thesession. Oil prices had already shed 3.6% on Friday, as expectations for a coordinated cut in global oil production began to fade after Iran and Russia emerged as potentially deal-breaking obstacles.
Saudi Arabian oil officials said they wouldn't attend a meeting with Russia on Monday, decreasing expectations for an agreement by the cartel at a meeting on Wednesday.
Shares of Royal Dutch Shell, BP and Total were among the worst performers in Europe on Monday, after the energy sector gained around 4.5% over the last two weeks.
"Speculation that OPEC would agree to production cuts spurred big increases last week, and we'll get this kind of back and forth until we get clarity on what exactly the deal is likely to be," said Ian Williams, strategist at brokerage Peel Hunt.
European bank shares also posted steep losses ahead of a Dec. 4 referendum on Italian constitutional reform. Many investors are concerned that a "no vote"and the potential political uncertainty that follows could derail plans to shore up the country's fragile banking system. The Euro Stoxx Banks Index was last down 1.6%, building on two weeks of declines.
Meanwhile, France's CAC-40 index was down 0.7%, while the yield on benchmark French government debt edged lower to 0.756% from 0.782% after free market social conservative François Fillon won France's center-right primary over the weekend. The move positions him as the leading mainstream candidate to run against National Front leader Marine Le Pen in next spring's presidential election.
Looking ahead, 2017 is set to be "a year of political uncertainty," which could weigh on the euro, said Carl Hammer, chief currency strategist at Swedish lender SEB.
"It will be fairly tricky for the European Central Bank to take a step back in a market where investors are cautious on Italy in particular and also see risks potentially in France," he said.
The euro was last up 0.1% against the dollar at $1.0599 as momentum for the dollar began to fade after its best three-week stretch since 2008. The WSJ Dollar Index was last down 0.2% after rising on expectations for higher interest rates, stronger U.S. economic growth and fiscal stimulus.
The dollar was down 0.8% against the yen at Yen112.3190, weighing on Japan's Nikkei Stock Average, which fell 0.1% after seven days of gains.
Some investors said the pullback in the dollar was likely to prove temporary with inflation expectations on the rise and the Federal Reserve widely expected to raise interest rates in December and in 2017.
The yield on the 10-year U.S. Treasury note fell to 2.329% from 2.359% on Friday.
Gold clawed back some losses after falling for much of this month, and was last up 1% at $1,190 an ounce.
Earlier, markets in Hong Kong and Shanghai advanced around 0.5% after U.S. stocks notched fresh records on Friday. Australian shares declined 0.8%, however, alongside the oil price.
Benoit Faucon, Kevin Baxter and William Horobin contributed to this article.
Write to Riva Gold at email@example.com
(END) Dow Jones Newswires
November 28, 2016 07:18 ET (12:18 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.