NEW YORK: Global stocks retreated on Thursday as expectations dimmed for new stimulus from the Federal Reserve and data indicated an economic slowdown in Europe and China, while the euro rose after sources said Spain was in talks over conditions for aid to reduce its borrowing costs. Three sources said the favored option for Spain is for an existing rescue fund, the European Financial Stability Facility, to purchase Spanish debt at primary auctions while the European Central Bank would intervene in the secondary market to lower yields.
Spain has not, however, made a final decision to request a bailout, the sources said, and no specific figure for aid has been discussed, one of the sources told Reuters. The euro rallied to a seven-week high against the dollar, up 0.3 percent at $1.2563, while the U.S. dollar index was down 0.2 percent at 81.366. Concern over the outlook for the global economy sapped investor sentiment as did comments on Thursday from James Bullard, president of the Federal Reserve Bank of St. Louis.
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