Stocks Drop Most in Two Weeks; Treasuries Decline: Markets Wrap

(Bloomberg) -- Stocks slumped in the U.S. and Europe as concern the recent rally had gone too far overshadowed new stimulus measures and encouraging economic data.

The S&P 500 Index fell less than half a percentage point, still its biggest drop in two weeks, snapping a four-day winning streak. Treasury yields rose as weekly jobless claims fell. The Stoxx 600 stayed lower even as the European Central Bank moved to add 600 billion euros to its pandemic purchase program, more than expected.

After exceptional gains for equities in the past week took valuations to the highest since 2000 and pushed technical levels on the S&P 500 toward overbought levels, traders are searching for further tailwinds to drive gains. The moves from the ECB and the slowdown in job losses weren't enough.

“We had stocks make a miraculous recovery from their March 23 lows and so it makes sense that we're unlikely to see the rally continue at the pace it has,” said Kristina Hooper, chief global market strategist at Invesco. “We're probably going to see more of a plateauing, more of trading in a range until there's a catalyst that moves them forward.”

Investors are awaiting plans for the next round of U.S. economic stimulus, but Trump administration officials have postponed discussions scheduled for this week, according to people familiar with the matter.

Elsewhere, gold gained along with silver. Stocks in Asia were mixed. West Texas oil slumped from a three-month high as OPEC+ unity was threatened by a long-running feud over compliance with production cutbacks.

Here are some key events coming up:

• The U.S. labor market report on Friday will probably show American unemployment soared to 19.5% in May, the highest since the 1930s.

Here are the major moves in markets:

Stocks

• The S&P 500 Index fell 0.3% at the close of trading in New York.
• The Nasdaq 100 Index fell 0.8%.
• The Stoxx Europe 600 Index declined 0.7%.
• The MSCI All-Country World Index fell 0.4%.

Currencies

• The Bloomberg Dollar Spot Index fell 0.3%.
• The euro rose 0.9% to $1.1336.
• The British pound rose 0.2% to $1.2602.
• The Japanese yen fell 0.2% to 109.13 per dollar.

Bonds

• The yield on 10-year Treasuries rose seven basis points to 0.81%.
• Germany's 10-year yield rose three basis points to -0.33%.
• Britain's 10-year yield rose three basis points to 0.30%.
• Australia's 10-year yield rose five basis points to 1.01%.

Commodities

• WTI crude fell 0.4% to $37.13 a barrel.
• Gold strengthened 0.9% to $1,715.59 an ounce.

©2020 Bloomberg L.P.