NEW YORK (Reuters) - The euro closed out the worst quarter in its 15-year history on Tuesday, slammed by monetary policy changes and worries about Greece, while U.S. stocks retreated a day after posting big gains.
But the S&P 500 and the Nasdaq registered their ninth straight quarterly gains.
The euro skidded 11 percent against the dollar in the first quarter reflecting investors’ expectations of divergent monetary policies. Investors are betting that the U.S. Federal Reserve will raise interest rates this year, while the European Central Bank’s one-trillion-euro economic stimulus program is weakening the euro.
The euro EUR= on Tuesday was down 0.8 percent against the dollar. The greenback .DXY marked its biggest quarterly rise against the world's top six currencies .DXY since 2008.
On Wall Street, energy shares were among the biggest drags, falling in tandem with a decline in crude oil prices, offsetting a lift from two days of corporate takeover announcements, including several biotech deals on Monday and Charter Communications’ (CHTR.O) plan to buy Bright House Networks for roughly $10 billion.
The Dow Jones industrial average .DJI fell 200.19 points, or 1.11 percent, to 17,776.12, the S&P 500 .SPX lost 18.35 points, or 0.88 percent, to 2,067.89, and the Nasdaq Composite .IXIC dropped 46.56 points, or 0.94 percent, to 4,900.88.
“Today’s price action is reflection of all the bad in the quarter - the stronger dollar, weaker oil - and in some respects just a snapback from yesterday’s outsized gains,” said John Canally, chief economic strategist for LPL Financial in Boston.
“Tomorrow’s a new quarter and there’s a new batch of people ready to take some risks, so I wouldn’t be surprised if we see an up day,” he said.
The benchmark S&P 500’s quarterly winning streak was its longest since 1998 while the Nasdaq’s was its longest ever. The Dow fell slightly for the quarter.
But all three indexes declined for the month of March.
U.S. Treasury debt prices rose, getting a lift from buying by institutional investors preparing their portfolios for the end of the quarter. The benchmark 10-year U.S. Treasury note US10YT=RR was up 7/32 in price, with the yield at 1.9353 percent.
The pan-European FTSEurofirst 300 .FTEU3 index closed off 0.7 percent as traders squared up for the quarter end.
Greece’s debt negotiations have made investors uneasy on both sides of the Atlantic. German Chancellor Angela Merkel said on Monday that Athens had a certain degree of flexibility on which reforms to implement but stressed that they must “add up.”
Greece’s leader, Alexis Tsipras, responded by appealing for an “honest compromise” but warned he would not agree to unconditional demands.
Oil took a slide on prospects that OPEC member Iran could reach a deal on its nuclear program that could allow Tehran to sell more of its oil onto an already saturated market.
U.S. crude CLc1 settled down 2.2 percent at $47.60 per barrel while Brent LCOc1 fell 2 percent to $55.11. [O/R]
Brent crude tumbled 12 percent for the month of March.
Additional reporting by Caroline Valetkevitch in New York; Editing by James Dalgleish, Dan Grebler and Leslie Adler