(Updates prices, changes comment)
* Snap British election boosts sterling
* Gold up, crude oil slips
* Focus on French elections this weekend, Korean peninsula
By Rodrigo Campos
NEW YORK, April 18 Sterling jumped, along with
gold, while stocks and the U.S. dollar fell on Tuesday after
Britain called a snap election for June, adding to investor
concerns over geopolitical instability.
The British pound rallied as much as 2.7 percent against the
U.S. dollar to hit its highest level since early October after
British Prime Minister Theresa May surprised markets by calling
for an early parliamentary election.
Investors also remain concerned about the French
presidential election this weekend and the possibility of U.S.
military action against North Korea.
In France, opinion polls have for months shown far-right
leader Marine Le Pen and centrist Emmanuel Macron qualifying
next Sunday for the May 7 run-off. But it remains a contested,
four-way vote, with conservative Francois Fillon and far-left
candidate Jean-Luc Melenchon.
On Wall Street, disappointing quarterly results from
corporate heavyweights Goldman Sachs and Johnson & Johnson
dragged major stock indexes lower.
"Those tend to be companies who manage earnings a little
better, the fact they have missed perhaps isn’t a very good
indication," said Tim Ghriskey, chief investment officer of
Solaris Asset Management in New York.
Investors are also concerned that the recent flaring of
geopolitical tensions has shifted focus away from expected
business-friendly reforms in the United States, seen as the fuel
for the U.S. equity rally that peaked in early March.
"There is some nervousness out there about the economy,
geopolitical issues and general unpredictability as well," said
The Dow Jones Industrial Average fell 122.98 points,
or 0.6 percent, to 20,513.94, the S&P 500 lost 7.7
points, or 0.33 percent, to 2,341.31 and the Nasdaq Composite
dropped 13.04 points, or 0.22 percent, to 5,843.75.
The pan-European FTSEurofirst 300 index lost 1.21
percent and MSCI's gauge of stocks across the globe
shed 0.41 percent.
Emerging market stocks lost 0.65 percent. MSCI's broadest
index of Asia-Pacific shares outside Japan
closed 0.83 percent lower, while Japan's Nikkei rose
The pound rallied as British Prime Minister Theresa May
called for an early election on June 8, saying she needed to
strengthen her hand in divorce talks with the European Union.
Deutsche Bank said the surprise election call is a
"game-changer" for the currency and that it will raise its
forecasts for the pound in the coming days.
The U.S. dollar was also pressured by lower Treasury yields.
"We still think the dollar is going to strengthen over time
based on the outlook for U.S. monetary policy... but for now,
with markets not heavily focused on monetary policy, it could
explain this consolidation" in the greenback, said Eric Viloria,
currency strategist at Wells Fargo.
The dollar index fell 0.79 percent, with the euro
up 0.84 percent to $1.0729.
The Japanese yen strengthened 0.46 percent versus the
greenback at 108.43 per dollar, while sterling was last
trading at $1.2845, up 2.26 percent on the day.
Oil prices were weighed by concerns that U.S. production
growth is undermining efforts to cut oversupply after a U.S.
government report said shale oil output in May was expected to
post the biggest monthly increase in more than two years.
U.S. crude fell 0.21 percent to $52.54 per barrel
and Brent was last at $55.01, down 0.63 percent on the
U.S. Treasury yields fell as nervousness ahead of France’s
first round of presidential elections this weekend and ongoing
geopolitical tensions increased demand for safe-haven U.S. debt.
Benchmark 10-year notes last rose 22/32 in price
to yield 2.1753 percent, from 2.252 percent late on Monday.
Gold rose and was not far from an intraday five-month high
touched on Monday, bolstered by the weaker dollar, North Korea
tensions and the French presidential election.
Spot gold added 0.6 percent to $1,291.30 an ounce.
U.S. gold futures gained 0.10 percent to $1,293.20 an
Copper lost 2.11 percent to $5,572.00 a tonne.
(Additional reporting by Karen Brettell, Fergal Smith, Jessica
Resnick-Ault, Chuck Mikolajczak and Saqib Iqbal Ahmed in New
York; Editing by Nick Zieminski and Dan Grebler)