(New throughout, updates prices, market activity and comments
to U.S. close)
* MSCI world index down 0.9%
* Major U.S. indices close lower
* Dollar supported by spending data
* Oil prices fall on lockdown fears
* Data shows rebound in U.S. consumer spending
* Global asset performance https://tmsnrt.rs/33TWwY1
By Matt Scuffham
NEW YORK, April 30 (Reuters) - World shares fell on Friday,
retreating from Thursday's record peak as investors worried
about valuations, while the dollar posted its largest daily gain
since late February.
MSCI's broadest gauge of world shares .MIWD00000PUS still
achieved its strongest month since November. The index, which
covers 50 markets, shed 0.92%.
U.S. indices closed lower after the S&P 500 hit at a record
high on Thursday.
The Dow Jones Industrial Average .DJI fell 185.51 points,
or 0.54%, to 33,874.85, the S&P 500 lost 30.3 points, or 0.72%,
to 4,181.17 and the Nasdaq Composite .IXIC dropped 119.87
points, or 0.85%, to 13,962.68.
Investors have been ebullient in recent weeks although some
have questioned the rally's lightning pace and worry that the
economic recovery and fiscal stimulus may already be priced in.
Traders are starting to focus more on value stocks, said
Dennis Dick, a trader at Bright Trading LLC.
"You wonder if this is a period where value is going to
continue to outperform growth," he said. "We didn't care at all
about valuations last year but we're starting to care about them
now."
Data on Thursday showed U.S. economic growth accelerated in
the first quarter, fueled by massive government aid to
households and businesses. On Wednesday, the
Federal Reserve gave reassurances that it was not yet ready to
discuss changing its easy monetary policy. Data showing a 4.2% rebound in U.S. consumer spending in
March, amid a 21.1% surge in income as households received
additional government aid, supported the dollar. The dollar index =USD , a measure of the greenback's value
against a basket of major peers, rose 0.735%.
However, the index was still heading for its worst monthly
performance since July 2020.
U.S. Treasury yields eased as investors purchased the debt
to rebalance investor portfolios for month-end, despite fears of
higher inflation as businesses reopen.
Benchmark 10-year notes US10YT=RR last rose 4/32 in price
to yield 1.6276%, from 1.64% late on Thursday.
With just over a half of S&P 500 companies reporting
earnings, about 87% beat market expectations, according to
Refinitiv, the highest level in recent years.
"The Federal Reserve continues to support, Biden has this
huge stimulus program as well and ... so far we have seen
relatively benign as well as strong earnings," said Eddie Cheng,
head of international multi-asset portfolio management at Wells
Fargo Asset Management.
For both the MSCI world index and the S&P 500, analysts are
expecting earnings to recover in the next 12 months to above
pre-pandemic levels.
European stocks ended lower after dismal economic data
stalled optimism about the recovery, but notched a third
straight month of gains.
The pan-regional STOXX 600 index .STOXX fell 0.3%,
hovering below its all-time high and ending the month 1.8%
higher.
Euro zone GDP data showed a year-on-year drop of 1.8% in the
first quarter, stronger than expectations of a 2% fall.
"There is increasingly bright light at the end of the
tunnel," Commerzbank analysts said.
"The speed of the vaccinations is picking up and the EU
recovery fund is also finally getting off the ground."
New coronavirus infections in India surged to a record,
however, and France's health minister said dangers of the
COVID-19 variant present in India must not be underestimated.
"Risky assets have had quite a few wobbles within the month.
... this is not going to be a straight line," said Cheng.
The euro EUR= fell 0.80% following the euro zone data. In
the previous session, the single currency had extended its bull
run to a two-month high of $1.2150.
"The euro is more sensitive to the European economic
outlook, than to (what) happens in the U.S.," said Kit Juckes,
head of FX strategy at Societe Generale.
Oil prices fell on concerns about wider lockdowns in India
and Brazil.
Brent crude futures LCOc1 settled down $1.30, or 1.9%, at
$67.26 a barrel. U.S. crude futures CLc1 settled down $1.47,
or 2.26%, at $63.54 per barrel.
U.S. crude futures settled at $63.58 per barrel, down 2.2%.
Brent crude futures settled at
Spot gold XAU= dropped 0.3% to $1,766.89 an ounce. U.S.
gold futures GCc1 settled 0.14% lower at $1,767.30 an ounce.
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World FX rates YTD http://tmsnrt.rs/2egbfVh
Asset performance in US dollar terms https://tmsnrt.rs/33TWwY1
Euro zone economic growth and stocks https://tmsnrt.rs/3e1Ejgi
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