U.S. Stocks Wobble After Starting 2018 on a High Note

By Mike Bird Features Dow Jones Newswires

U.S. stocks wobbled Monday after notching a run of records in the first week of trading.

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The Dow Jones Industrial Average fell 26 points, or 0.1%, to 25269 shortly after the opening bell. The S&P 500 lost less than 0.1% and the Nasdaq Composite fell 0.1%.

Stocks began the year on an upbeat note, buoyed by investors' optimism over the global economy and bets that central banks are unlikely to pressure markets by raising interest rates too quickly.

Many believe the gains will continue in 2018, although some analysts have warned that valuations have made U.S. stocks look pricey relative to their international counterparts.

Elsewhere, the Stoxx Europe 600 rose 0.3% on Monday, lifted by a batch of solid economic data.

The European Commission's economic sentiment indicator for the European Union reached 116 in December -- the highest level since August 2000.

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In Asia, last week's rally continued across most equity markets. Hong Kong's Hang Seng Index gained 0.3% and Taiwan's Taiex closed at a fresh 28-year high, up 0.3%. Japanese markets were closed.

In Australia, the S&P/ASX 200 hit a new 10-year high Monday, up 0.1%.

Some forecasters suggest that a period of more sustained inflation would be negative for stock markets, especially if economic growth plateaus.

"The 'Goldilocks' environment has been a massive boon to risk assets as it typically is historically. A move into a period of reflation would be less bullish for equities," Citi analysts wrote in a research note Monday, noting that further interest-rate increases would likely mean less easy financial conditions, crimping stock markets.

In foreign-exchange markets, the U.S. dollar pared some of the previous week's losses, with the WSJ Dollar Index -- which measures the currency against a basket of 16 others -- rising 0.3%.

Write to Mike Bird at Mike.Bird@wsj.com

(END) Dow Jones Newswires

January 08, 2018 10:14 ET (15:14 GMT)