(Adds U.S. market open, previous LONDON)
* Wall Street falls as recovery seen far in future
* European shares slip from 11-week highs
* Hong Kong, China shares hit by new protests
* Brent crude futures slip 5%
* World FX rates in 2019: http://tmsnrt.rs/2egbfVh
By Herbert Lash
NEW YORK, May 27 (Reuters) - The euro retreated from near
two-month highs and equity markets wavered on Wednesday even as
the European Union unveiled a 750 billion euro ($823 billion)
recovery fund that helped offset concerns about unrest in Hong
Kong over Beijing's proposed security laws.
U.S. Treasury yields also retreated from gains on the
European Commission's proposed stimulus plan to bolster
economies ravaged by the coronavirus pandemic boosted risk
appetite and reduced demand for safe-haven bonds and gold.
The commission's plan also includes 1.1 trillion euros for
the EU's next long-term budget that would contribute to the
recovery fund that is aimed especially at Italy and Spain.
News of the plan earlier underpinned a broad market rally in
Europe but much of Wall Street slipped as hopes of a pick-up in
business activity hit the reality of an economy that is unlikely
to see full recovery until late next year.
"Market participants may be assuming a little bit more
positive news than is actually going to come down the pike,"
said David Kelly, chief global strategist at JPMorgan Asset
Management.
"We will see a start of a recovery, but it shouldn't be
misinterpreted," Kelly said. "We're not going to get back to
full employment or even an unemployment rate below 10% any time
this year and maybe it will take most of next year."
MSCI's gauge of stocks across the globe .MIWD00000PUS shed
0.19%, while the pan-European STOXX 600 index .STOXX lost
0.31%.
On Wall Street, the Dow Jones Industrial Average .DJI rose
178.04 points, or 0.71%, to 25,173.15 on rising financials and
industrial stocks.
But the broader S&P 500 .SPX lost 6.46 points, or 0.22%,
to 2,985.31 and tech-heavy Nasdaq Composite .IXIC dropped
155.04 points, or 1.66%, to 9,185.18.
Tech heavyweights Amazon.com AMZN.O , Microsoft Corp
MSFT.O and Facebook Inc FB.O led the Nasdaq lower, while
healthcare .SPXHC and technology stocks .SPLRCT were among
the S&P 500 sector indexes in the red. Technology and healthcare
have outperformed during the coronavirus-led market slump.
The euro has struggled since falling in March, when
investors rushed for the safety of dollars. But analysts say the
recovery fund proposals, if they can win over EU members
skeptical of an earlier Franco-German plan, could push the euro
higher. The dollar index =USD rose 0.213%, with the euro EUR=
down 0.05% to $1.0974. The Japanese yen JPY= weakened 0.24%
versus the greenback at 107.83 per dollar.
Oil prices fell after U.S. President Donald Trump said he
was working on a strong response to China's proposed security
law in Hong Kong. Tense relations between the world's two
biggest economies could weigh on global businesses and oil
demand, which already has been hit by the coronavirus pandemic.
U.S. crude CLc1 recently fell 5.85% to $32.34 per barrel
and Brent LCOc1 was at $34.40, down 4.89% on the day.
Concerns about the U.S.-China stand-off over Hong Kong kept
a dampener on market hopes for economic recovery.
Riot police fired pepper pellets on protesters in Hong
Kong's main business district, rekindling concern about the
unrest seen last year that hit the territory's economy.
MSCI's ex-Japan Asia-Pacific index .MIAPJ0000PUS fell
overnight 0.4% as Hong Kong and mainland China shares extended
declines. Hong Kong's Hang Seng .HSI fell 1.0% and mainland
shares .CSI300 were down 0.8%, amid fears the protests would
worsen antagonism between the United States and China.
The Chinese yuan weakened to the lowest levels since early
September in both onshore and offshore trade. The onshore
renminbi slipped 0.3 to as low as 7.1595 per dollar CNY=CFXS ;
the offshore currency fell 0.4% to 7.1760 per dollar CNH= .
Benchmark 10-year notes US10YT=RR fell 3.1 basis points to
yield 0.6672%.
Spot gold XAU= dropped 0.6% an ounce.
($1 = 0.9091 euros)
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Asia-Pacific valuations https://tmsnrt.rs/2Dr2BQA
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