GLOBAL MARKETS-US stocks little changed, Euro up on ECB hopes

  • Business
  • Wednesday, 29 Aug 2012

NEW YORK: The euro rose against the U.S. dollar o n T uesday on bets the European Central Bank will soon act to tackle the bloc's debt crisis, while U.S. crude oil prices rallied as Hurricane Isaac approached the Gulf Coast.

Stocks were little changed on Wall Street as mixed data gave investors little indication whether Federal Reserve Chairman Ben Bernanke might signal more economic stimulus from the Fed when he speaks on Friday. Trading was very light, the third-lowest volume for a full session so far this year.

U.S. crude prices settled 0.9 percent higher as Hurricane Isaac made its way through the Gulf of Mexico, forcing companies to close down oil rigs and refineries.

Investors were looking ahead to Bernanke's speech on Friday at an annual meeting of central bankers in Jackson Hole, Wyoming, where clues on more stimulus could translate into a weaker U.S. dollar.

The European Central Bank said its president, Mario Draghi, will not attend the conference due to a heavy workload, news that gave further support to the euro.

Draghi's absence is seen as a hint that "he will be busy finalizing the details of policy proposals to be unveiled in the coming weeks," according to Nick Bennenbroek, head of currency strategy at Wells Fargo Bank. The ECB will meet on September 6.

The single currency rose 0.55 percent to $1.2568.

Upbeat U.S. housing data made it harder for investors to determine if the Fed will announce further stimulus to the U.S. economy, a bet that has supported a recent rally in equities and other risk assets.

"Looks like we are taking a wait-and-see on Bernanke," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago.

He said a handful of global economic indicators were mixed, leaving room for the Fed to pump more money into the economy.

"Unfortunately a fair amount of stimulus is probably priced in so we are at a period now where bad news is good news until we hear what (Bernanke) is actually going to do," said Ablin.

The Dow Jones industrial average fell 21.68 points, or 0.17 percent, to 13,102.99. The S&P 500 Index dipped 1.14 points, or 0.08 percent, to 1,409.30. The Nasdaq Composite Index rose 3.95 points, or 0.13 percent, to 3,077.14. An MSCI gauge of global equities fell 0.2 percent and the pan-European FTSEurofirst 300 index closed down 0.7 percent. U.S. dollar-denominated Nikkei futures fell 0.55 percent.

The S&P 500 Index dipped 1.14 points, or 0.08 percent, to 1,409.30.

The Nasdaq Composite Index rose 3.95 points, or 0.13 percent, to 3,077.14.

An MSCI gauge of global equities fell 0.2 percent and the pan-European FTSEurofirst 300 index closed down 0.7 percent.

Global growth worries resurfaced after Japan cut its assessment for the economy, citing slow-downs in the United States and China as well as Europe's debt crisis.

Adding to signs of weakness, Spain said its recession had deepened in the second quarter as domestic spending slumped in the wake of tough austerity measures aimed at tackling the government's fiscal problems.

U.S. Treasuries prices edged up as traders anticipated hints from Bernanke of further economic stimulus, possibly in the form of more bond purchases.

The benchmark 10-year U.S. Treasury note was up 5/32, the yield at 1.6352 percent. - Reuters

Wall Street ends flat, volume among lightest of year

NEW YORK: U.S. stocks ended little changed in another day of scarce activity on Tuesday after mixed economic data gave investors little reason to shift their focus from Federal Reserve Chairman Ben Bernanke's speech on Friday.

The Fed chief is scheduled to address a conference of central bankers in Jackson Hole, Wyoming, and could announce new measures to boost growth. While Bernanke is expected to keep alive expectations for a third round of major bond buying by the Fed, or quantitative easing, he could keep markets guessing about the actual timing.

Volume was among the lightest of the year after Monday's lightest trading in 2012. August is a slow season, and investors mostly stayed on the sidelines, anticipating Bernanke's speech.

"I don't think you can read a lot from what's going on in the market right now," said John Fox, co-manager of the FAM Value Fund, in Cobleskill, New York. "Because there's nothing going on, everyone is waiting for the speech on Friday."

The latest sign of slowing in the global economy added to expectations for more central bank stimulus. Japan cut its assessment of economic growth, citing a deceleration in U.S. and Chinese demand for Japanese exports.

U.S. consumer confidence unexpectedly weakened in August to its lowest in nine months as Americans turned more pessimistic about the short-term outlook, according to the Conference Board.

But in another report, the S&P/Case Shiller composite index of 20 metropolitan areas showed U.S. home prices rose for a fifth consecutive month, a sign of slow improvement in the housing sector.

Volume was 4.60 billion shares traded on the New York Stock Exchange, the Nasdaq and the NYSE MKT, compared with Monday's 2012 low 4.46 billion shares. The year-to-date average is about 6.6 billion.

The S&P 500 has been pinned in a fairly tight range over the last three weeks, finding a support level at 1,400 while also unable to convincingly pierce the April high of 1,422.38, which has acted as a resistance point. The index has been unable to muster a move of at least 1 percent in either direction since August 3.

Advancers outpaced decliners on the NYSE by about 4 to 3 and on the Nasdaq by about 14 to 9. - Reuters

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