NEW YORK: World stocks fell on Thursday, Sept 16 as data showed the U.S. economy's recovery remained tepid, while the dollar rose to a session high against the yen a day after Japan's huge intervention to weaken its currency.
U.S. government bond prices fell after Philadelphia Federal Reserve data suggested slower business contraction in the U.S. Mid-Atlantic region, while U.S. claims for unemployment benefits dropped to a two-month low but still remained high.
Gold rose to a record high above $1,275 per ounce as jitters about any further Japan yen selling and broader economic uncertainty enticed more investors to the safe-haven commodity.
"We've had a lot of negative things thrown at market this morning, and it's battling back against a lot of economic and other fundamental negative news. Volumes are extremely light," said Tom Schrader, managing director, U.S. Equity Trading at Stifel Nicolaus Capital Markets in Baltimore.
The Dow Jones industrial average was down 11.73 points, or 0.11 percent, at 10,561.00. The Standard & Poor's 500 Index was down 3.16 points, or 0.28 percent, at 1,121.91. The Nasdaq Composite Index was down 4.65 points, or 0.20 percent, at 2,296.67.
The FTSEurofirst 300 index of top European shares fell 0.8 percent as weak British retail sales data added to investor worries about the economy following disappointing U.S. numbers in the previous session. The share index is up about 5 percent in September but off about 3 percent from its April peak.
MSCI's All-Country World Index was down 0.33 percent, while Tokyo's benchmark Nikkei stock index ended down 0.07 percent.
YEN TALK
Investors were still coming to terms with Wednesday's currency intervention by Japan, its first in six years. The Bank of Japan's money market data showed the yen-selling intervention may have totaled around 1.76 trillion to 1.86 trillion yen ($20.52-21.69 billion).
Adding to investor nerves, Japanese Prime Minister Naoto Kan pointed to more potential yen selling.
The dollar reached as high as 85.84 yen on electronic trading platform EBS. It was last up 0.1 percent at 85.79 yen.
"There's no sign of the Bank of Japan this morning yet on markets, but they were successful yesterday and we are beginning to see some funds moving in the same direction, unwinding long yen positions," said Greg Salvaggio, vice president of trading at Tempus Consulting in Washington.
Wednesday's move was designed to protect Japanese exports from a too-competitive exchange rate and ward off job losses. Some market players may be willing to test Japan's resolve, but there was little indication on Thursday.
The euro rose to its highest in more than a month against the dollar to $1,3112 and the yen to 112.24 after strong demand at a Spanish bond auction reinforced confidence in Europe's sovereign issues.
The Swiss franc weakened broadly after the Swiss National Bank kept interest rates unchanged as expected and forecast a slowdown in economic growth because of strength in the currency.
Spain sold a combined 4 billion euros in 10-year and 30-year bonds, at the top of its targeted range, attracting solid demand and lower yields than its last auction in June.
The country was among those most in the limelight during the sovereign debt crisis earlier this year.
BONDS AND COMMODITIES
The benchmark 10-year U.S. Treasury note was down 12/32, with the yield at 2.7645 percent after data showed slower business contraction in the U.S. Mid-Atlantic region.
The 2-year U.S. Treasury note was up /32, with the yield at 0.4796 percent. The 30-year U.S. Treasury bond was down 30/32, with the yield at 3.9293 percent.
In energy and commodities prices, crude oil fell 74 cents, or 0.97 percent, to $75.28 per barrel, and spot gold prices rose $8.90, or 0.70 percent, to $1276.40. Earlier on Thursday it hit a record $1,277.70 an ounce. U.S. December gold futures also rose to a historic high. - Reuters
U.S. government bond prices fell after Philadelphia Federal Reserve data suggested slower business contraction in the U.S. Mid-Atlantic region, while U.S. claims for unemployment benefits dropped to a two-month low but still remained high.
Gold rose to a record high above $1,275 per ounce as jitters about any further Japan yen selling and broader economic uncertainty enticed more investors to the safe-haven commodity.
"We've had a lot of negative things thrown at market this morning, and it's battling back against a lot of economic and other fundamental negative news. Volumes are extremely light," said Tom Schrader, managing director, U.S. Equity Trading at Stifel Nicolaus Capital Markets in Baltimore.
The Dow Jones industrial average was down 11.73 points, or 0.11 percent, at 10,561.00. The Standard & Poor's 500 Index was down 3.16 points, or 0.28 percent, at 1,121.91. The Nasdaq Composite Index was down 4.65 points, or 0.20 percent, at 2,296.67.
The FTSEurofirst 300 index of top European shares fell 0.8 percent as weak British retail sales data added to investor worries about the economy following disappointing U.S. numbers in the previous session. The share index is up about 5 percent in September but off about 3 percent from its April peak.
MSCI's All-Country World Index was down 0.33 percent, while Tokyo's benchmark Nikkei stock index ended down 0.07 percent.
YEN TALK
Investors were still coming to terms with Wednesday's currency intervention by Japan, its first in six years. The Bank of Japan's money market data showed the yen-selling intervention may have totaled around 1.76 trillion to 1.86 trillion yen ($20.52-21.69 billion).
Adding to investor nerves, Japanese Prime Minister Naoto Kan pointed to more potential yen selling.
The dollar reached as high as 85.84 yen on electronic trading platform EBS. It was last up 0.1 percent at 85.79 yen.
"There's no sign of the Bank of Japan this morning yet on markets, but they were successful yesterday and we are beginning to see some funds moving in the same direction, unwinding long yen positions," said Greg Salvaggio, vice president of trading at Tempus Consulting in Washington.
Wednesday's move was designed to protect Japanese exports from a too-competitive exchange rate and ward off job losses. Some market players may be willing to test Japan's resolve, but there was little indication on Thursday.
The euro rose to its highest in more than a month against the dollar to $1,3112 and the yen to 112.24 after strong demand at a Spanish bond auction reinforced confidence in Europe's sovereign issues.
The Swiss franc weakened broadly after the Swiss National Bank kept interest rates unchanged as expected and forecast a slowdown in economic growth because of strength in the currency.
Spain sold a combined 4 billion euros in 10-year and 30-year bonds, at the top of its targeted range, attracting solid demand and lower yields than its last auction in June.
The country was among those most in the limelight during the sovereign debt crisis earlier this year.
BONDS AND COMMODITIES
The benchmark 10-year U.S. Treasury note was down 12/32, with the yield at 2.7645 percent after data showed slower business contraction in the U.S. Mid-Atlantic region.
The 2-year U.S. Treasury note was up /32, with the yield at 0.4796 percent. The 30-year U.S. Treasury bond was down 30/32, with the yield at 3.9293 percent.
In energy and commodities prices, crude oil fell 74 cents, or 0.97 percent, to $75.28 per barrel, and spot gold prices rose $8.90, or 0.70 percent, to $1276.40. Earlier on Thursday it hit a record $1,277.70 an ounce. U.S. December gold futures also rose to a historic high. - Reuters
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