Global stock markets rose while shares on Wall Street were mixed on Tuesday after U.S.
NEW YORK, July 18 (Reuters) - Global stock markets rose while shares on Wall Street were mixed on Tuesday after U.S. retail sales rose less than expected in June, but consumers boosted or maintained spending elsewhere, raising the odds the Federal Reserve hikes interest rates next week.
Retail sales increased 0.2% last month, the U.S. Commerce Department said, but, excluding automobiles, gasoline, building materials and food services, core retail sales increased 0.6% in June. Headline data for May also was revised higher to show sales gaining 0.5% instead of 0.3% as previously reported.
The dollar slid to a 15-month low against a basket of currencies, and Treasury yields also fell even as futures pointed to a 97.3% probability that the Fed will hike rates by 25 basis points on July 26, according to CME Group's FedWatch Tool.
The dollar index fell 0.12% and the euro rose 0.08% to $1.1243, after hitting a fresh 17-month high of $1.1276
The major U.S. stock indices were mixed, with the S&P 500 and Dow Industrials rising and the Nasdaq falling, in a sign investors are shifting investments away from the tech-oriented megacap stocks that have dominated returns this year.
Microsoft Corp, Amazon.com Inc and Apple Inc led the Nasdaq lower.
"The Magnificent Seven that outperformed the first five months of the year will probably consolidate a little bit and underperform," said Thomas Hayes, chairman and managing member of Great Hill Capital LLC in New York.
The Dow and the S&P 500, meanwhile, crept higher after some of the top U.S. lenders, including Morgan Stanley and Bank of America, reported upbeat earnings for the second quarter.
The Dow Jones Industrial Average rose 1.05%, the S&P 500 gained 0.37% and the Nasdaq Composite dropped 0.13%.
In Europe, the pan-regional STOXX 600 index rose 0.61% and MSCI's gauge of stocks across the globe gained 0.36%.
Asian stocks fell earlier in the session as markets caught up with growth data from Monday showing the post-pandemic bounce in China's economy was over.
Deutsche Bank said it was lowering its forecast for China's economic growth this year, following similar moves on Monday by J.P. Morgan, Morgan Stanley and Citigroup.
"China is super important to Europe," said Fiona Cincotta, senior markets analyst at City Index. "There are a lot of concerns about what weakness in China could mean for Germany and the German economy, and I think we're seeing that being played on in the DAX, which is struggling to push higher."
Besides the Fed, the European Central Bank and the Bank of Japan also hold policy meetings next week.
Expectations that the Fed and the ECB will diverge on rate hikes have caused the dollar to weaken recently.
Euro zone government bond yields were down, with the German 10-year yield hitting its lowest since June 29 at 2.337%, down around 1.1 basis points on the day.
The yield on U.S. 10-year notes was down 3.9 bps at 3.7539%.
Oil prices were little changed on Tuesday as investors weighed a possible tightening of U.S. crude supplies against weaker-than-expected Chinese economic growth.
U.S. crude rose 1.48% to $75.25 per barrel and Brent was at $79.45, up 1.21%.
Spot gold added 1.4% to $1,982.30 an ounce.
(Reporting by Elizabeth Howcroft; Additional reporting by Selina Li in Hong Kong; Editing by Chizu Nomiyama and Jonathan Oatis)
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