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GLOBAL MARKETS-Stocks pare losses on possible U.S. tariff exemptions; oil slides

Published 08/03/2018, 09:17 am
Updated 08/03/2018, 09:20 am
© Reuters.  GLOBAL MARKETS-Stocks pare losses on possible U.S. tariff exemptions; oil slides
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(Updates to U.S. market close)

* U.S. data drags crude prices lower

* U.S. stocks off lows; Europe edges up

* U.S. dollar pares losses

By Rodrigo Campos

NEW YORK, March 7 (Reuters) - A key gauge of world stockmarkets slipped on Wednesday but ended far above session lows,as fears that U.S. President Donald Trump will proceed withprotectionist tariffs and risk a global trade war were temperedby signs the move could include carve-outs for key partners.

Stocks and the U.S. dollar recovered most of the day'slosses after the White House said proposed steel and aluminumtariffs could exclude Mexico, Canada and possibly othercountries. was volatile through the session as some investorswagered that even with the departure of Trump's chief economicadviser Gary Cohn, until now a key ally of free markets insidethe White House, the president's hard talk on trade could be atactic amid ongoing agreement negotiations.

White House spokeswoman Sarah Sanders told a media briefing"there are potential carve-outs for Mexico and Canada based onnational security, and possibly other countries as well." ceremony for Trump to sign a document to set steel andaluminum tariffs is planned for Thursday afternoon, a sourcetold Reuters. Mexican peso and Canadian dollar recovered from steeplosses, with the peso turning higher against the greenback afterSanders' comments.

Against the greenback, the Mexican peso MXN= gained 0.15percent to 18.71. The Canadian dollar CAD=D4 was down 0.21percent to 1.29 per U.S. dollar.

"It makes investors less worried if the tariff isn't appliedso broadly," said Janna Sampson, co-chief investment officer atOakBrook Investments LLC in Lisle, Illinois.

"But it's speculation at this point. We have nothing inwriting. If there's one thing we've learned from thisadministration it's that it could change by the time it's inwriting."

The overall outlook for the U.S. currency was downbeat,despite the mixed sentiment over trade policy. Goldman Sachseconomists wrote that tariffs similar to those proposed by Trumphave usually been associated with subsequent currency weakness.

"We therefore see the latest news as an additional reason toremain cautious on the outlook for the broad dollar," Goldmaneconomists Zach Pandl and Karen Reichgott wrote.

The dollar index .DXY , which tracks the greenback againsta basket of other major currencies, fell 0.04 percent, with theeuro EUR= up 0.09 percent to $1.2413.

The Japanese yen JPY= strengthened 0.02 percent versus thegreenback at 106.10 per dollar, while sterling GBP= was lasttrading at $1.3905, up 0.14 percent on the day.

STOCKS DIP, OIL DROPS

Losses on the S&P 500 were as deep as 1 percent at onepoint, but ebbed and flowed as traders sought clues on thefuture of trade policy in the day's headlines. U.S. indexes rosesharply after Sanders' comments.

Equities also got a bid earlier after White House tradeadviser Peter Navarro, who favors strong tariffs, said in aBloomberg interview he was not a candidate to replace Cohn.

"The market sees him (Navarro) as a very protectionist type.If he's not in the running, the market seems to like that," saidJoe Saluzzi, co-manager of trading at Themis Trading in Chatham,New Jersey.

Jason Ware, chief investment officer at Albion Financial inUtah, said that with Trump keeping a close eye on stock indexes,selling sparked by tariff and trade war talks could change thepresident's mind.

"Indeed, here is a president who judges his success by usingthe stock market as an important barometer for that. So if themarket votes an overwhelming vote of no confidence on thesetariffs, is there a chance that things change next week?"

“I suspect that it's still a fluid situation," Ware said.

The Dow Jones Industrial Average .DJI fell 82.76 points,or 0.33 percent, to 24,801.36, the S&P 500 .SPX lost 1.32points, or 0.05 percent, to 2,726.8 and the Nasdaq Composite .IXIC added 24.64 points, or 0.33 percent, to 7,396.65.

European car makers .SXAP ended up 0.6 percent after dropping more than 1 percent on the risk of a hike in tariffs onexports to the United States.

MSCI's gauge of stocks across the globe .MIWD00000PUS shed0.12 percent, while the pan-European FTSEurofirst 300 index .FTEU3 earlier closed up 0.35 percent.

Emerging market stocks .MSCIEF lost 0.40 percent. MSCI'sbroadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.58 percent lower, while Japan's Nikkei .N225 percent.

Oil prices fell after U.S. government data showed anincrease in inventories, with Washington's plans for importtariffs weighing further on investor sentiment.

U.S. crude CLc1 fell 2.01 percent to $61.34 per barrel andBrent LCOc1 was last at $64.51, down 1.95 percent.

Benchmark 10-year U.S. Treasury notes US10YT=RR last fell2/32 in price to yield 2.8827 percent, from 2.877 percent lateon Tuesday.

The 30-year bond US30YT=RR last fell 9/32 in price toyield 3.1506 percent, from 3.136 percent late on Tuesday.

Spot gold XAU= percent to $1,325.29 an ounce. U.S. goldfutures GCcv1 fell 0.67 percent to $1,326.20.

Copper CMCU3 lost 0.90 percent to $6,941.00 a tonne.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^Global assets in 2018

http://tmsnrt.rs/2jvdmXlGlobal currencies vs. dollar

http://tmsnrt.rs/2egbfVhGlobal bonds dashboard (DO NOT USE UNTIL UPDATE FOUND)

http://tmsnrt.rs/2fPTds0Emerging markets in 2018

http://tmsnrt.rs/2ihRugVMSCI All Country Wolrd Index Market Cap

http://tmsnrt.rs/2EmTD6j

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