(Updates prices)
By Koh Gui Qing
NEW YORK, Oct 13 (Reuters) - The U.S. dollar rose from a three-week low on Tuesday while shares in Europe and the United States eased, as news of a pause in Johnson & Johnson's COVID-19 vaccine trial led investors to take stock of recent rallies before chasing further gains.
Some analysts said Tuesday's pullback in stock markets was not indicative of a deeper aversion to risk, given that many investors are convinced that there is more fiscal stimulus to come in the United States.
Still, the dip in stock markets was accompanied by firmer demand for traditional safe-haven assets such as the dollar and government bonds. A stronger dollar in turn weighed on gold prices.
Trade data from China released overnight that suggested the world's second-largest economy was rebounding was mostly brushed aside by stock and bond markets, though it boosted oil prices as investors hoped for a slow recovery in energy demand.
The S&P 500 .SPX fell 23.5 points, or 0.65%, to 3,511.20, but still within sight its record high of 3,580.84 struck on Sept. 2. The Dow Jones Industrial Average .DJI dropped 139.8 points, or 0.48%, to 28,699.30. The Nasdaq Composite .IXIC erased earlier gains to slip 36.3 points, or 0.3%, to 11,842.03 points.
Shares in Johnson & Johnson JNJ.N sagged 2.6% as investors digested news that a participant in its COVID-19 vaccine trial had fallen ill and that it would take the company at least a few days to evaluate the situation. see the quick introduction of a vaccine as key to helping economies recover. J&J's news comes after its rival AstraZeneca AZN.L , which uses a similar technology, paused the trial of its experimental vaccine in September due to a participant's unexplained illness.
"Markets have already priced in perfection," said Ken Polcari, chief market strategist at SlateStone Wealth LLC in Florida. "It's 'buy the rumor, sell the news.'"
European shares also struggled as investors found a reason in news of Johnson & Johnson's delayed trial to take profits.
The Euro STOXX 600 .STOXX lost 0.77%, ending three straight days of gains, with markets in Frankfurt .GDAXI , London .FTSE and Paris .FCHI mirroring its moves.
The sentiment in European and U.S. equities defied earlier resilience in Asia, where Chinese shares got a lift from data that showed exports rising 9.9% in September and imports swinging to a 13.2% gain, versus a 2.1% drop in August.
The data suggested Chinese exporters were recovering from the pandemic's damage to overseas orders and helped Chinese blue-chip shares .CSI300 rise 0.33%. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS , however, trimmed earlier gains and was little changed by the end of Tuesday.
The overall subdued mood in stock markets contrasted with the dollar, which is on track for its best daily performance in three weeks, as the dollar index =USD climbed 0.54% against a basket of other currencies to 93.546. USD/
The Australian dollar, on the other hand, was slugged by news that Beijing has stopped taking shipments of Australian coal. The Aussie AUD=D4 dropped as much as 0.76% to $0.7152 AUD=D4 .
Government bond yields mostly fell as demand for safe-haven bonds firmed.
The benchmark 10-year Treasury US10YT=RR yield retreated to 0.7289%, a low not seen since Aug. 4. US/
Government bond yields in the euro zone also held near recent troughs, with hefty supply failing to dent a market bolstered by expectations for further central bank easing.
Germany's 10-year Bund yield touched -0.538% DE10YT=RR , its lowest in just over a week. Italian IT10YT=RR and Greek GR10YT=RR benchmark 10-year debt both hit record lows.
A stronger dollar capped gold XAU= prices, which dropped 1.5% to $1,893.01 per ounce. GOL/
Benefiting from China's promising trade data, Brent crude futures LCOc1 were up 73 cents, or 1.75%, to $42.45 a barrel. U.S. West Texas Intermediate crude CLc1 futures rose 81 cents, or 2.05%, to $40.24 a barrel.