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dateline; previous LONDON)
* Oil slumps 2 pct on signs U.S. output growing
* DJIA down, moves away from 20,000 mark
* U.S. Treasury yields fall as risk appetite fades
* Tough EU talk from UK's May boosts global bond prices
By Gertrude Chavez-Dreyfuss
NEW YORK, Jan 9 Oil prices fell on Monday on
signs growing U.S. output could undermine plans by other
producers to cut supply, while sterling slumped following
comments by British Prime Minister Theresa May alluding to an
aggressive exit from the European Union.
Sterling was the big mover on currency markets, falling 1
percent against the dollar and the euro to more than two-month
lows after the remarks by May, who said she was willing to
sacrifice the country's single-market membership for more
control over its borders.
U.S. Treasury yields retreated in line with British bond
yields after May's comments.
Meanwhile, the drop in oil prices weighed on energy stocks
on Wall Street as the Dow Jones Industrial Average moved further
from hitting the historic and widely awaited 20,000 mark.
"We see the optimism surrounding OPEC and non-OPEC
production cuts being counterbalanced by fears of higher U.S.
crude production as the higher rig count of last Friday still
weighs," said Hans van Cleef, senior energy economist at ABN
In late morning trading, Brent crude was last down
$1.46, or 2.56 percent, at $55.64 a barrel. U.S. crude
was last down $1.39, or 2.57 percent, at $52.6 per barrel.
In the U.S. equity market, the Dow Jones industrial average
fell 42.63 points, or 0.21 percent, to 19,921.17, while
the S&P 500 was down 4.01 points, or 0.17 percent, at
A gain in technology stocks lifted the Nasdaq Composite
by 7.39 points, or 0.13 percent, to 5,528.44.
"The market is building drama around 20,000 and if and when
we get promising earnings reports, the Dow will go through the
point like a hot knife through butter," said Andre Bakhos,
managing director at Janlyn Capital in Bernardsville, New
U.S. government bond prices rose, with the 10-year note
up 8/32 in price to yield 2.386 percent, compared
with 2.418 percent late on Friday.
In line with U.S. Treasuries, German 10-year yields
, the benchmark for euro zone borrowing costs, fell
and last stood at 0.28 percent.
Analysts said a soft dollar weighed on U.S. Treasuries
yields as well. The dollar slid against the safe-haven yen as
risk appetite declined, while sterling sank to more than
two-month lows after May's remarks.
"Anything that suggests a hard Brexit is more likely ... is
very damaging to UK growth prospects," said Richard Franulovich,
a senior currency strategist at Westpac Banking Corp in New
The dollar index, which tracks the greenback versus
a basket of six currencies, fell 0.16 points or 0.16 percent, to
102.06. The greenback also fell 0.4 percent against the yen to
In Asia, MSCI's broadest index of Asia-Pacific shares
outside Japan rose 1.1 points or 0.25 percent,
to 438.77. Australia's S&P/ASX200 rose 0.9 percent while
Hong Kong shares rose 0.2 percent.
Trading was light because Japan was shut for a holiday.
The MSCI world equity index, which tracks
shares in 45 nations, fell 0.88 points or 0.2 percent, to 428.8.
A focus for the week will be a news conference on Wednesday
at which U.S. President-elect Donald Trump may give more details
about the policies he will seek to implement after he takes
office on Jan. 20.
Expectations of more economic stimulus from a Trump
administration have helped to boost U.S. stocks and bond yields.
(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by
Nigel Stephenson, Karolin Schaps in LONDON, Yashaswini
Swamynathan in Bengaluru, Sam Forgione and Richard Leong in New
York; Editing by Bernadette Baum)