U.S. stocks decline as oil slips with dollar

(Updated 1:46 p.m.)
U.S. stocks edged lower, with the Dow Jones industrial Average failing to make progress toward 20,000, as oil erased gains and a rally in the dollar faltered in light trading ahead of the holidays.

The Dow slipped below 19,960 in trading 29 percent lower than the 30-day average at this time of day. An advance in European stocks ended after equities reached the highest level of the year, as banks dragged indexes lower. Oil fell 1 percent after a government report showed U.S. crude stockpiles increased for the first time in five weeks. The yen strengthened and the dollar slid from the highest since 2003 versus the euro.

Volumes are thinning and swings in global equities are muted, with a volatility gauge for European shares at the lowest since 2014. Stocks have been rising to new highs on the prospects for increased government spending in the U.S. Mohamed El-Erian and his former colleagues at Pacific Investment Management Co. say now’s a good time to take advantage of the latest rallies in global financial markets and scale back from risk.

“It makes total sense to take some money off the table,” El-Erian, the chief economic adviser at Allianz SE and a Bloomberg View columnist, said Tuesday. “We’ve priced in no policy mistakes. We’ve priced in no market accidents, and we’ve ignored all sorts of political issues,” he said on Bloomberg TV. In October, El-Erian said that he held about 30 percent of his own money in cash.

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