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(Bloomberg) -- U.S. stocks fell, with small caps bearing the brunt of selling, and Treasuries advanced as markets struck a tone of caution at the start of a week stuffed with catalysts. The euro gained.
The Russell 2000 Index sank the most since August and the S&P 500 Index retreated from a record amid reports that proposed cuts to corporate taxes would occur in phases over several years. Health-care shares led declines. Markets earlier shrugged off the first charges from Robert Mueller’s investigation. Apple Inc. rose on signs of strong demand for its latest phone, buoying the Nasdaq 100 Index. The company headlines another week of major earnings, with its report due Thursday.
Ten-year Treasury yields fell below 2.4 percent, with President Donald Trump’s choice to lead the Federal Reserve due any day. The dollar slumped versus the euro, with the Fed, Bank of England and Bank of Japan slated to meet this week. In Europe, equities nudged higher, with markets showing little sign of distress as the Spanish government took control of the Catalan government. The British pound strengthened ahead of the BOE rate decision Thursday.
Trump’s former campaign manager Paul Manafort and his business partner were the first people charged, indicating that Special Counsel Robert Mueller’s probe is intensifying and could pose a danger to the White House at a time that Trump is working to push his tax plan through Congress.
This market, everyone has their pencils out on what the EPS estimate is going to be at the end of 2018 if we get tax reform, if we get that 20 percent rate,” Peter Boockvar, chief market analyst at Lindsey Group, said by phone. “And everyone has written down $150 a share, so if all of a sudden that’s not going to happen because of this phase-in, then you’re going to have immediate adjustment to pricing.”
Elsewhere, equity benchmarks fluctuated in Japan and Chinese shares fell, with the Shanghai Composite Index tumbling the most in more than two months as the nation’s bond slump deepened amid mounting deleveraging concerns. And profit reports due this week from some of the world’s largest companies -- including Apple Inc. -- may show if there’s enough juice in the earnings season to propel a leg higher for global shares.
Terminal users can read more in our Markets Live blog.
Here are some key upcoming events this week:
- Trump has said he’ll reveal his choice to lead the Fed by Friday.
- The U.S. central bank’s next rate decision is on Wednesday, with economists expecting policy makers to hold rates for now and to increase them at the December meeting.
- The U.S. October payroll report comes out Friday. On Monday, personal income and spending data comes out, which features the Fed’s preferred inflation gauge.
- Trump starts an 11-day trip to Asia, his first as president, on Friday. Trade and security issues — particularly North Korea — will probably be in focus.
- A probable BOE rate hike on Thursday will be the first in a decade.
- Euro-area GDP growth is seen slowing, while GDP reports from France and Spain and national CPI prints from the big four euro-zone economies are also among data piling up this week.
- The slew of earnings releases will culminate with Apple Inc. results.
And these are the main moves in markets:
- The Russell 2000 fell 1.5 percent as of 2:11 p.m. in New York.
- The S&P 500 lost 0.3 percent and the Dow Jones Industrial Average lost the same amount. The Nasdaq 100 Index rose 0.1 percent.
- The Stoxx Europe 600 Index rose 0.1 percent, the highest in more than five months.
- Spain’s IBEX Index gained 1.8 percent to the highest in four weeks.
- The Bloomberg Dollar Spot Index decreased 0.1 percent.
- The euro increased 0.2 percent to $1.1628.
- The British pound gained 0.5 percent to $1.3188.
- The yield on 10-year Treasuries decreased two basis points to 2.39 percent.
- Germany’s 10-year yield rose less than one basis point to 0.39 percent.
- Britain’s 10-year yield dipped one basis point to 1.348 percent.
- Spain’s 10-year yield dropped eight basis points to 1.51 percent.
- West Texas Intermediate crude climbed 0.7 percent to $54.30 a barrel, the highest in more than six months.
- Gold added 0.14 percent to $1,273.60 an ounce.
- Japan’s Topix index and the Nikkei 225 Stock Average closed flat in Tokyo.
- South Korea’s Kospi index gained 0.2 percent and Australia’s S&P/ASX 200 Index rose 0.3 percent.
- The Shanghai Composite Index fell 0.8 percent. The Hang Seng Index in Hong Kong declined 0.1 percent.
- China’s 10-year yield climbed 6 basis points to 3.90 percent, touching the highest since 2014.
- The Japanese yen rose 0.1 percent to 113.61 per dollar.
--With assistance from Adam Haigh
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