By Riva Gold
Stocks turned slightly lower while bond yields continued to rise Friday, as investors stepped up bets that a growing U.S. economy would lead to higher interest rates.
Futures pointed to a 0.2% opening loss for the S&P 500, while the Stoxx Europe 600 reversed early gains to fall 0.2% late morning.
Shares of utilities companies, which are sensitive to higher interest rates, dragged down the European stock market.
Miners and oil and gas companies also came under pressure, as a stronger dollar weighed on oil and metals prices, while Italian bank shares were set for their fifth day of steep declines ahead of a December referendum.Still, stock markets in Europe, the U.S. and Japan were on track to end the week higher, continuing a modest rally since the U.S. election.
"Investors are just looking at what's in front of them today: the economy is improving, U.S. interest rates are going to be rising, and we'll get some infrastructure spending next year--that's a very positive message in the short term," said Colin Graham at BNP Paribas Investment Partners.
Longer term for stocks, there are many unknowns, he said, including the fate of the bond market.
The yield on the 10-year U.S. Treasury note climbed to 2.339% early Friday. The 10-year Treasury yield hit its highest level of the year on Thursday after economic data and comments from Federal Reserve Chairwoman Janet Yellen reinforced expectations for higher U.S. interest rates this year and in 2017.
The 10-year German government bond yield steadied around 0.287%, as the gap between U.S. and German government-bond yields increased to its widest in decades.
In currencies, the WSJ Dollar Index rose 0.1% on Friday after advancing for nine consecutive trading days. It was steady against the euro and up 0.2% against the yen, after rising above Yen110 for the first time in five months.
Moves in the yen supported the Japanese stock market, which touched a 10-month high on Friday, but the stronger dollar weighed on dollar-denominated commodities.
Brent crude oil was down 0.1% at $46.46 a barrel while gold fell 0.7% to $1,208 an ounce, around a six-month low.
Write to Riva Gold at firstname.lastname@example.org
(END) Dow Jones Newswires
November 18, 2016 06:50 ET (11:50 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.