(Adds close of U.S. markets; oil, gold settlement prices)
* Pharma stocks fall after Trump says he will cut drug
* Rate expectations underpin dollar
* Oil prices slip further on surge in U.S. stockpiles
By Herbert Lash and Dion Rabouin
NEW YORK, March 7 A gauge of global stock
markets slipped on Tuesday as the Dow and S&P 500 notched their
first back-to-back losses in more than a month, while
expectations the Federal Reserve will raise interest rates
supported the U.S. dollar.
Shares of large U.S. pharmaceutical and biotechnology
companies sold off after a tweet from U.S. President Donald
Trump on the need to lower drug prices. Shares of Pfizer Inc
and Amgen Inc each dropped more than 1 percent.
The dollar rose 0.16 percent against a basket of six
major trading currencies, 0.29 percent against the British pound
and 0.14 percent against the Swiss franc ahead of
the Fed's meeting next week. Jitters over economic and political
developments in Europe also lifted the greenback.
U.S. Treasury yields rose, supporting the dollar, as
investors made room for this week's supply of government debt
and also in anticipation of a Fed rate hike this month.
The monthly U.S. jobs report, due on Friday, is expected to
show an increase of 190,000 jobs, probably enough to push the
Fed to raise its base rate again for the second time in four
The market is taking in stride expectations the Fed will
raise rates, unlike past years, said Rahul Shah, chief executive
of Ideal Asset Management in New York.
"As long as we keep getting macroeconomic data that's
supportive of a rate hike we're going to continue to see stocks
rally," Shah said. "If financials continue to rally with higher
rates and industrials rally with better economic data, that
could be enough to power the market higher," he said.
The Dow Jones Industrial Average closed down 29.58
points, or 0.14 percent, to 20,924.76. The S&P 500 lost
6.92 points, or 0.29 percent, to 2,368.39 and the Nasdaq
Composite dropped 15.25 points, or 0.26 percent, to
Stocks in Europe closed slightly lower as weak corporate
earnings and the biggest fall in German industrial orders since
the depths of the global financial crisis weighed on sentiment.
Europe's FTSEurofirst index of the 300 leading
regional shares fell 0.28 percent, pulled down by healthcare and
MSCI's all-country world stock index dipped
Brent crude settled down 9 cents at $55.92 a barrel
while U.S. West Texas Intermediate (WTI) crude fell 6
cents to settle at $53.14.
Oil prices slid further in post-settlement trade after data
from the American Petroleum Institute showed U.S. crude stocks
last week rose 11.6 million barrels, or more than five times
U.S. Treasury yields rose, with the 30-year yield at its
highest in more than a month as investors prepared for this
week's supply of coupon-bearing government debt led by $24
billion of three-year notes. They also rose after data showed
the U.S. trade deficit grew in January to its highest monthly
level in nearly five years.
Investors also reduced their bond holdings in anticipation
of a rate increase at the Fed's policy meeting next week.
Benchmark 10-year Treasury notes fell 7/32 in
price to yield just under 2.52 percent, while the 30-year bond
fell 14/32 in price to yield 3.12 percent after
touching its highest since Feb. 3, Reuters data showed.
U.S. gold futures for April delivery settled down 0.8
percent at $1,216.10 an ounce.
(Reporting by Herbert Lash and Dion Rabouin; Editing by Chizu
Nomiyama and James Dalgleish)