(Updates prices, changes comments)
* Snap British election boosts sterling
* Gold up, crude oil at 11-day low
* Focus on French elections this weekend, Korean peninsula
By Rodrigo Campos
NEW YORK, April 18 Sterling jumped along with
gold, and stocks and the U.S. dollar fell on Tuesday, after
Britain called a snap election for June, adding to investors
concern about geopolitical instability.
Sterling jumped as much as 1.6 percent against the dollar to
hit its highest levels since mid-December, after British Prime
Minister Theresa May surprised markets by calling for an early
parliamentary election in June.
Investors also remain concerned about the French
presidential election this weekend and the possibility of
military action against North Korea.
In France, opinion polls have for months shown far-right
leader Marine Le Pen and centrist Emmanuel Macron qualifying
next Sunday for the May 7 run-off, in what remains the most
significant threat to the eurozone and EU in years.
In New York, disappointing quarterly results from corporate
heavyweights Goldman Sachs and Johnson & Johnson dragged Wall
Street stocks lower.
Investors are also concerned that the recent flaring of
geopolitical tensions has shifted focus away from
business-friendly reforms in the United States that were seen as
the fuel to the equities rally that peaked in early March.
"With concerns of the (U.S. President Donald) Trump agenda
being pushed out a little bit and with the geopolitical
tensions, this (earnings disappointments) is not the kind of
news you needed," said Robert Pavlik, chief market strategist at
Boston Private Wealth.
The Dow Jones Industrial Average fell 144.82 points,
or 0.7 percent, to 20,492.1, the S&P 500 lost 11.29
points, or 0.48 percent, to 2,337.72 and the Nasdaq Composite
dropped 23.34 points, or 0.4 percent, to 5,833.45.
The pan-European FTSEurofirst 300 index lost 1.21
percent and MSCI's gauge of stocks across the globe
shed 0.61 percent.
Emerging market stocks lost 0.68 percent. MSCI's broadest
index of Asia-Pacific shares outside Japan
closed 0.9 percent lower, while Japan's Nikkei rose 0.35
The pound rallied as British Prime Minister Theresa May
called for an early election on June 8, saying she needed to
strengthen her hand in divorce talks with the European Union.
Deutsche Bank said the surprise election call is a
"game-changer" for the currency, and that it will raise its
forecasts for the pound in the coming days.
The U.S. dollar was also pressured by lower Treasury
"We still think the dollar is going to strengthen over time
based on the outlook for U.S. monetary policy... but for now,
with markets not heavily focused on monetary policy, it could
explain this consolidation" for the greenback, said Eric
Viloria, currency strategist at Wells Fargo.
The dollar index fell 0.51 percent, with the euro
up 0.55 percent to $1.0699.
The Japanese yen strengthened 0.37 percent versus the
greenback at 108.51 per dollar, while Sterling was last
trading at $1.2762, up 1.60 percent on the day.
Oil prices were weighed by concerns that U.S. production
growth is undermining efforts to cut oversupply after a U.S.
government report said shale oil output in May was expected to
post the biggest monthly increase in more than two years.
U.S. crude fell 0.49 percent to $52.39 per barrel
and Brent was last at $54.88, down 0.87 percent on the
U.S. Treasury yields fell as nervousness ahead of France’s
first round of Presidential elections this weekend and ongoing
geopolitical tensions increased demand for safe-haven U.S. debt.
Benchmark 10-year notes last rose 17/32 in price
to yield 2.1912 percent, from 2.252 percent late on Monday.
Gold rose and was not far from an intraday five-month high
touched Monday, bolstered by the weaker dollar, North Korea
tensions and the French presidential election.
Spot gold added 0.4 percent to $1,289.50 an ounce.
U.S. gold futures fell 0.03 percent to $1,291.50 an
Copper lost 1.94 percent to $5,581.50 a tonne.
(Additional reporting by Yashaswini Swamynathan in Bengaluru
and Karen Brettell, Fergal Smith, Jessica Resnick-Ault and Saqib
Iqbal Ahmed in New York; Editing by Nick Zieminski and Clive