GLOBAL MARKETS-Wall Street pulls back, Treasury yields inch lower as eyes turn to Fed, earnings

(Updates to U.S. market close)
By Stephen Culp
NEW YORK, April 6 (Reuters) - Wall Street lost ground,
pulling back from the prior session's record closing highs and
Treasury yields edged lower on Tuesday as investors trained
their focus on the approaching earnings season and the Federal
Reserve's economic outlook.
All three major U.S. stock indexes closed in the red, led by
the blue-chip Dow, which notched an all-time closing high on
Monday.
"It's a normal follow-on to a strong day," said Matthew
Keator, managing partner in the Keator Group, a wealth
management firm in Lenox, Massachusetts. "The market is catching
its breath from the job number and a strong day like yesterday,
which reflected a high in the market."
Indeed, Friday's blockbuster U.S. jobs report was followed
on Monday by PMI data showing the services sector's fastest
expansion on record. This was followed by a PMI report from
China that confirmed activity in its services sector is
accelerating. The market often takes a breath as earnings season draws
near, a first-quarter results will be significant, marking the
anniversary of the coronavirus outbreak.
"How the market digests those first year-over-year comps
remains to be seen," Keator added. "Generally speaking, it's
understandable to have a positive outlook based on a significant
amount of pent-up demand."
The U.S. Federal Reserve is expected to release the minutes
from its last monetary policy meeting on Wednesday and market
participants will parse it for any changes to the central bank's
economic outlook.
"The market is going to be dissecting (Federal Reserve
Chairman Jerome) Powell's comments to see if there's anything
embedded in them that might reflect a change in policy," Keator
said.
The Dow Jones Industrial Average .DJI fell 96.95 points,
or 0.29%, to 33,430.24, the S&P 500 .SPX lost 3.97 points, or
0.10%, to 4,073.94 and the Nasdaq Composite .IXIC dropped 7.21
points, or 0.05%, to 13,698.38.
European stocks closed at a record high, having recovered
all pandemic-related losses as investors bet on a speedy global
economic recovery. The pan-European STOXX 600 index .STOXX rose 0.70% and
MSCI's gauge of stocks across the globe .MIWD00000PUS gained
0.18%.
Emerging market stocks rose 0.61%. MSCI's broadest index of
Asia-Pacific shares outside Japan .MIAPJ0000PUS closed 0.7%
higher, while Japan's Nikkei .N225 lost 1.30%.
U.S. Treasury yields dipped, with 5-year notes leading the
decline, on investor views that market pricing based on an
earlier-than-expected tightening by the Fed was too aggressive.
Benchmark 10-year notes US10YT=RR last rose 18/32 in price
to yield 1.6578%, from 1.72% late on Monday.
The 30-year bond US30YT=RR last rose 28/32 in price to
yield 2.3199%, from 2.363% late on Monday.
The dollar slipped to a two-week low against a basket of
world currencies, with traders taking advantage of its strong
March performance as dropping Treasury yields pressured the
greenback. The dollar index .DXY fell 0.78%, with the euro EUR= up
0.54% to $1.1875.
The Japanese yen strengthened 0.39% versus the greenback at
109.77 per dollar, while Sterling GBP= was last trading at
$1.3829, down 0.49% on the day.
Crude oil prices partially rebounded from the previous
session's losses, lifted by strong data from the United States
and China. U.S. crude CLc1 gained 1.16% to settle at $59.33 per
barrel, and Brent LCOcv1 settled at $62.74 per barrel, up
0.95% on the day.
Gold prices touched their highest level in more than a week,
benefiting from the soft dollar and lower Treasury yields.
Spot gold XAU= added 0.9% to $1,743.17 an ounce.