By Corrie Driebusch and Riva Gold
U.S. stocks slipped Monday, snapping the Russell 2000's longest winning streak in 20 years.
The index of small-company shares rose for 15 consecutive trading sessions through Friday. The gains began before the U.S. presidential election, but accelerated after Nov. 8 as investors poured money into U.S.-based companies. Investors bet that President-elect Donald Trump's policies could improve domestic growth, lower corporate taxes and increase infrastructure spending -- which they believe will benefit smaller, domestically focused companies that are typical of the Russell 2000.
On Monday, the index declined 1.3%.
The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite also edged lower. The declines represent an unusual pullback for U.S. stocks after a weekslong rally that sent all three indexes -- plus the Russell -- to fresh records again Friday.
For the 12 trading sessions following the U.S. presidential election, the Dow industrials rose 4.5% through Friday and only fell two days.
The blue-chip index declined 0.3% on Monday. The S&P 500 fell 0.5%, and the Nasdaq Composite slipped 0.6%.
Indexes in both Europe and the U.S. were weighed down by falling bank stocks, which have been big winners since the election. Financial companies in the S&P 500 were the worst-performing sector Monday, falling 1.4%.
Ahead of Monday, banks had also posted stand-out performance in recent weeks as investors bet on lightened regulation under President-elect Trump and higher interest rates. On Monday, Russell 2000 component Bank of the Ozarks fell 3.1%. In the past month the bank is up 24%.
Banks in the Stoxx Europe 600 fell 1.8% ahead of a Dec. 4 referendum on Italian constitutional reform.
Many investors are concerned that a "no" vote and the political uncertainty that could follow might derail plans to shore up the country's fragile banking system. Recent polls suggest the proposed changes are likely to be rejected, an outcome that Prime Minister Matteo Renzi has said would prompt him to resign. Italy's FTSE MIB index dropped 1.8%. The broader Stoxx Europe 600 fell 0.8%.
Shares of oil and gas companies also struggled Monday as crude prices swung ahead of a meeting of major oil producers in Vienna. U.S.-traded crude oil gained 2.2% to $47.08 a barrel.
The Organization of the Petroleum Exporting Countries agreed in September to trim production amid a global glut of supply, but left the details of who cuts how much to a meeting in Viennaon Wednesday.
"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.
The U.S. dollar weakened Monday after its best three-week stretch since 2008. Emerging-market currencies and the yen rose sharply against the dollar, sending the WSJ Dollar Index, which measures the dollar against a basket of 16 currencies, down 0.3% on Monday.
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.
U.S. government bonds strengthened, sending the yield on the 10-year U.S. Treasury note down to 2.319% from 2.359% on Friday.
Earlier, Hong Kong's Hang Seng and the Shanghai Composite advanced 0.5%.Write to Corrie Driebusch at firstname.lastname@example.org and Riva Gold at email@example.com
(END) Dow Jones Newswires
November 28, 2016 16:21 ET (21:21 GMT)
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