Dollar turns positive for 2018, US stocks mostly lower

NEW YORK: The dollar broke into positive territory for the year and US bond yields inched higher again on Tuesday as the recent rise in oil prices fueled expectations the Federal Reserve could flag more interest rate hikes at its policy meeting this week.

The Dow and S&P 500 were lower in late afternoon trading as the latest batch of earnings from companies such as Pfizer  and Tapestry, formerly Coach, disappointed investors, and as energy shares fell.

Apple's quarterly results are due after Wall Street closes and will be a big focus after several weeks of speculation about ebbing smartphone demand based on selective reports from companies in its supply chain.

Technology sector results so far - at least from the likes of Amazon, Alphabet, Microsoft, Samsung and SAP - have broadly beaten forecasts for Q1 and the overall aggregate US earnings growth is tracking seven-year highs of almost 25 percent.

The dollar attracted attention as it turned positive for 2018 just ahead of a two-day Fed meeting that is expected to pave the way for more rate hikes this year.

A divergence between growth and the rate outlook versus those of other countries prompted investors to push the currency higher.

The dollar index rose 0.71 percent, with the euro  down 0.74 percent to $1.1988.

"We're pretty much back to where we were at the beginning of the year, so a lot of the dollar weakness has been pretty much wiped out," said Sireen Harajli, foreign exchange strategist at Mizuho in New York.

The Dow Jones Industrial Average fell 153.05 points, or 0.63 percent, to 24,010.1, the S&P 500 lost 3.5 points, or 0.13 percent, to 2,644.55 and the Nasdaq Composite  added 35.32 points, or 0.5 percent, to 7,101.59.

MSCI's gauge of stocks across the globe shed 0.38 percent.

May Day holidays across Asia and Europe meant trading was thinner than usual.

For Europe's stocks followers, only London's FTSE and Denmark's bourse were open.

US Treasury yields rose, with prices pressured ahead of a quarterly refunding announcement. The US Treasury is scheduled to announce its findings on a refunding survey on Wednesday, with analysts projecting an increase in auction sizes, or new issuance at different points on the yield curve.

Benchmark 10-year notes last fell 9/32 in price to yield 2.9681 percent, from 2.936 percent late on Monday.

Brent oil prices eased off four-month highs of just over $75 a barrel set on Monday on worries that US President Donald Trump may pull out of the 2015 Iran nuclear deal and thereby bring back sanctions on its oil output.

The White House had said on Monday that information provided  by Israel on Iran's nuclear program had provided "new and compelling details".

A high-level US trade delegation will also be in Beijing for meetings later this week, amid lingering worries about a possible trade war between the world's top two economies.

US crude fell $1.32 to settle at $67.25 a barrel, while Brent dropped $1.56 to $73.13.

Gold slid to a four-month low as the dollar strengthened. Spot gold was down 0.7 percent at $1,306.26 an ounce, off an earlier low $1,301.51, its weakest since Dec. 29.