The U.S. dollar rose to almost a two-year high against the euro on Thursday on an upbeat U.S. capital goods report, while world equities slid as weak economic data from South Korea and a profit warning from 3M Co. renewed concerns about global growth.
New orders for U.S.-made capital goods increased by the most in eight months in March, which combined with worries about the economic health of the euro zone knocked the single currency to its lowest against the greenback since May 2017.
Other data showed the number of Americans filing claims for unemployment benefits was the biggest in 19 months last week, but the trend remains consistent with a strong labor market.
“The dollar is benefiting from strong domestic data, weak data abroad and a slew of dovish central bank meetings,” said John Doyle, vice president of dealing and trading at Tempus Inc in Washington.
Canada’s main stock index finished flat on Thursday, hurt by a drop in Bombardier Inc.’s shares following a weak full-year outlook.
The Toronto Stock Exchange’s S&P/TSX Composite index was unofficially down 10.42 points, or 0.06 per cent, at 16,576.10.
Bombardier fell 15.1 per cent after cutting its full-year profit and revenue forecast as delays in some large projects hit its dominant transportation unit that makes rail cars.
Five of the index’s 11 major sectors were lower with the materials sector down 0.6 per cent and energy stocks dipping 0.7 per cent.
The financials sector rose 0.2 per cent, a day after the Canadian central bank held interest rates steady as expected.
Leading the index were Ivanhoe Mines Ltd., up 13.0 per cent, West Fraser Timber Co Ltd., up 4.1 per cent, and Spin Master Corp., higher by 3.3 per cent.
Lagging shares were Celestica Inc., down 15.9 per cent and Methanex Corp., lower by 5.6 per cent.
The euro fell 0.22 per cent to $1.1127.
European shares slid after a mixed bag of earnings from the region, while dismal reports from U.S. industrial companies including 3M pulled stocks on Wall Street lower.
Finnish telecom network equipment maker Nokia tumbled 9.0 per cent, its biggest decline in 18 months. Nokia reported a surprise quarterly loss after it failed to supply 5G telecoms equipment on time.
The pan-European STOXX 600 index closed down 0.21 per cent and MSCI’s gauge of stock performance in 47 countries shed 0.16 per cent.
On Wall Street, strong results by Facebook and Microsoft kept the tech-rich Nasdaq near record highs and offset a drop in 3M, United Parcel Service Inc and other industrials.
Facebook rose 5.9 per cent and Microsoft Corp climbed 3.3 per cent.
The Dow industrials fell 1 per cent at one point, dragged by a 13-per-cent decline in 3M shares after the company reported a lower-than-expected quarterly profit, cut its 2019 earnings forecast and said it would lay off 2,000 workers globally.
The Dow Jones Industrial Average fell 135.1 points, or 0.51 per cent, to 26,461.95, the S&P 500 lost 1.09 points, or 0.04 per cent, to 2,926.16 and the Nasdaq Composite added 16.67 points, or 0.21 per cent, to 8,118.68.
Asian markets slid earlier in the day, losing 0.5 per cent as South Korea’s economy unexpectedly contracted in the first quarter, a reminder of economic fragility outside the United States.
Shanghai’s bourse also fell late in the day, losing more than 2 per cent on the latest central bank efforts to temper expectations for further monetary policy easing.
Chinese officials also warned of protracted pressure on economic growth, casting a shadow over hopes for a sustained recovery in the world’s second-biggest economy.
The dollar index, which measures the greenback versus a basket of six major peers, held near its highest level since May 2017. The index was up 0.1 per cent.
The Japanese yen strengthened 0.48 per cent versus the greenback at 111.63 per dollar.
The Turkish lira weakened 0.95 per cent against the dollar after Turkey’s central bank left interest rates unchanged at 24 per cent but in a dovish shift dropped a previous reference to possible further tightening if needed to address inflation.
U.S. Treasury yields rose as investors piled into the safe-haven government bonds following a dovish report from Canada’s central bank and solid demand at auction for $41 billion of new five-year notes.
Benchmark U.S. Treasury 10-year notes fell 3/32 in price to push yields up to 2.5325 per cent.
U.S. gold futures settled unchanged at $1,279.70 an ounce.
Oil prices eased after Brent touched $75 per barrel on Thursday for the first time in nearly six months on the suspension of some Russian crude exports to Europe as investors second-guessed the market’s ability to rally further.
Brent crude futures settled at $74.35, losing 22 cents, or 0.30 per cent, after rallying for most of the day to a high of $75.60, the strongest since Oct. 31.
U.S. West Texas Intermediate crude settled at $65.21 a barrel, falling 68 cents, or 1.03 per cent, after hitting a session high of $66.28.
Prices began to slip just before the settlement in a technical move, analysts said.
“I think the inability to hold $66 most of the day saw some of the late-comers give up the ghost, so it was really a technical move,” said John Kilduff, a partner at Again Capital LLC in New York. “There’s just some fatigue in this market after the spectacular gains.”