By Riva Gold
U.S. stocks and bonds kicked off November with declines on Tuesday.
The Dow Jones Industrial Average fell for a third straight month in October, its longest monthly losing streak since 2011. The index declined 1.6% in the three months through Monday and hasn't hit a new high since mid-August.
On Tuesday, the index fluctuated between gains and losses, and was recently down 23 points, or 0.1%, at 18119.
Bonds sold off, as data showed China's factory activity rising to its highest level in two years. Concerns about the Chinese economy had spooked markets atthe start of the year, but investors said recent data has been more encouraging for global growth.
The yield on 10-year German debt rose to as high as 0.203%, close to its highest since May, before retreating to 0.183%, according to Tradeweb. U.S. Treasury yields climbed to 1.859% from 1.834% on Monday. Yields move inversely to prices.
"I think higher yields are a mixed blessing for the stock market," said Peter Tuz, president at Chase Investment Counsel. "Clearly if higher yields suggest stronger economic growth and higher earnings growth, that's not necessarily bad...as long as yields are not so high that bonds become much of an alternative for equities," he said.
The S&P 500 fell 0.2% and the Nasdaq Composite slipped 0.1%.
Shares of L Brands fell 7.4% after the company said Monday that sales at its Victoria's Secret stores continued to slow down.
Coach rose 4.9% after the company reported profit climbing in thelast quarter, while Archer Daniels Midland rose 7.8% after its profit topped expectations.
In recent sessions, investors have also been grappling with a series of upcoming events this month, including the U.S. election, the rest of the third-quarter earnings season and meetings of the Federal Reserve and Bank of England later this week.
"People are sitting on their hands, waiting for a bit of a clearer horizon on what 2017 will look like, said Alex Dryden, global market strategist at J.P. Morgan Asset Management.
Asian markets were buoyed by the better-than-expected reading on the Chinese economy. Shares in Hong Kong led gains as the Hang Seng rose 0.9%, while stocks the Shanghai Composite Index advanced 0.7%. Purchasing Managers' Indexes from Nikkei and IHS Markit also pointed to improvements in Japan, South Korea and Taiwan.
Japan's Nikkei Stock Average inched up 0.1%, while the dollar was down 0.3% against the yen at Yen104.611 after the Bank of Japan left its stimulus program unchanged as expected but reduced its inflation forecasts.
In currency markets, the WSJ Dollar Index, which measures the dollar against a basket of 16 currencies, fell 0.3%. The Federal Reserve is widely expected to keep interest rates unchanged Wednesday but leave the door open to a rise in December.
The euro rose 0.6% against the dollar to $1.1042, while the British pound fell 0.1% against the dollar to $1.2231. Bank of England Gov. Mark Carney said in a letter Monday that he plans to serve an extra year in his post, ahead of a meeting by the central bank on Thursday.
Write to Riva Gold at email@example.com
(END) Dow Jones Newswires
November 01, 2016 11:32 ET (15:32 GMT)
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