(Bloomberg) -- U.S. stocks swung between gains and losses after a selloff in Asia amid a broad risk-off mood. The Treasury yield curve continued to flatten, with spreads at the lowest in a decade.
The S&P 500 was little changed, with software makers advancing while energy shares slumped as oil fell toward $56 a barrel. The Stoxx Europe 600 Index almost erased losses of as much as 1 percent following the Nikkei’s worst rout in nine months. Treasuries rose with the dollar as investors’ focus turned to efforts to avert a U.S. government shutdown Saturday. Developing-nation stocks sank to a two-month low.
Global markets have succumbed to a bout of profit taking this week, while U.S. equities struggled to maintain gains, as traders move out of some of 2017’s biggest winners, including technology shares and emerging-market stocks. The pause in the rally comes as investors assess U.S. tax reform developments and wrangling over spending after a Republican plan to avoid a federal shutdown Saturday was thrown into disarray by infighting.
Investors are “locking in profits earlier than usual for the year and not opening any new positions,” said Andrew Clarke, director of trading at Mirabaud (Asia) Ltd. “Eventually, as profit taking subsides, buying for the new year will appear as people look toward 2018.”
The flattening of the Treasury yield curve, a persistent theme over the past several weeks, continued Wednesday. The spread between five- and 30-year U.S. yields tumbled to 58 basis points as the market prices in more rate hikes from the Federal Reserve next year.
Elsewhere, sterling weakened as efforts to rescue Brexit talks appeared to stumble. Australia’s dollar dropped as slower-than-expected growth spurred traders to dial back their forecasts on interest-rate increases.
Terminal customers can read more in our Markets Live blog.
Here are some of the key events facing markets in the coming days:
- The European Commission College of Commissioners discusses Brexit on Wednesday and will likely make its recommendation on whether sufficient progress has been made to move negotiations onto the future relationship.
- The U.S. faces a partial government shutdown after money runs out on Dec. 8 if Congress can’t agree on a spending bill by then.
- U.S. employers probably hired at a robust pace in November as the unemployment rate held at an almost 17-year low. The Labor Department’s jobs report Friday may also show a bump up in average hourly earnings.
- Brazil’s central bank is set to cut its key rate to record of 7 percent Wednesday.
These are the main moves in markets:
Stocks
- The S&P 500 slipped less than 0.1 percent as of 1:05 p.m. in New York.
- The Stoxx Europe 600 Index fell 0.1 percent.
- The U.K.’s FTSE 100 Index gained 0.3 percent.
- Japan’s Nikkei 225 Stock Average decreased 2 percent to a three-week low.
- The MSCI Asia Pacific Index sank 1.3 percent to the lowest in almost six weeks.
- The MSCI Emerging Market Index dipped 1.7 percent.
Currencies
- The Bloomberg Dollar Spot Index gained 0.3 percent.
- The euro declined 0.3 percent to $1.1791.
- The British pound decreased 0.5 percent to $1.3373.
- The Japanese yen rose 0.3 percent to 112.24 per dollar.
Bonds
- The yield on 10-year Treasuries decreased three basis points to 2.32 percent.
- Germany’s 10-year yield declined two basis points to 0.29 percent.
- Britain’s 10-year yield decreased three basis points to 1.23 percent.
Commodities
- West Texas Intermediate crude fell 2.3 percent to $56.30 a barrel.
- Gold fell 0.1 percent to $1,264.41 an ounce.
- Copper gained 0.6 percent to $2.963 a pound.
