GLOBAL MARKETS-U.S. stocks fall after Bernanke remarks; gold crumbles

Wed Feb 29, 2012 5:54pm EST

* U.S. stocks fall for 1st time in five sessions
    * Gold falls 5 pct, biggest drop in three years
    * Bernanke disappoints investors who hoped for stimulus hint
    * Brent crude closes February with biggest gains in a year

    By Barani Krishnan and Herbert Lash	
    NEW YORK Feb 29 (Reuters) - U.S. stocks fell on
Wednesday for first time in five sessions and gold suffered its
biggest one-day drop in more than three years after Federal
Reserve Chairman Ben Bernanke disappointed investors who had
hoped for a strong signal of more stimulus.  	
    The major U.S. stock indexes still posted solid gains for
the month, and the Nasdaq briefly topped 3,000 on Wednesday for
the first time since December 2000.	
    Bernanke, in testimony to Congress, gave a tempered view of
the U.S. economy, pouring cold water on the notion that recent
upbeat signs herald a stronger recovery. But he gave no hint of
new asset purchases, which the Fed has used in recent years to
boost growth.  	
    His comments drove selling in Treasuries as well as
equities, though losses in stocks were curbed by reports
suggesting improvement in the economy.	
    The government reported the U.S. economy grew 3.0 percent in
the fourth quarter, revised up from its prior estimate of 2.8
percent. The Fed in its Beige Book, an anecdotal report on
regional activity, said the U.S. economy expanded modestly in
January through mid-February.  	
    But the disappointment over Bernanke's failure to hint at
more stimulus and the end of the European Central Bank's second
round of cheap bank loans drove sentiment.	
   "People just viewed him as slightly more hawkish than he has
been previously - I would emphasize the word 'slightly,'" said
Michael Marrale, managing director and head of sales trading at
RBC Capital Markets in New York.	
    On Wall Street, the modest scope of the day's decline
indicated investors were inclined to take some profits after a
five-month rally that has driven the S&P 500 up 8.6 percent
since the end of December. 	
    For the month, the Dow gained 2.5 percent, the S&P 500 rose
4.1 percent and the Nasdaq climbed 5.4 percent. 	
    "With the sprint we've made the last two months that has
caught many by surprise, I think it'll be a welcome relief for
some investors at least if the market undergoes some technical
selling or at least pause from here," said Gary Flam, portfolio
manager at Los Angeles' Bel Air Investments, which has about
$6.5 billion under management.	
    At the close, the Dow Jones industrial average was
down 53.05 points, or 0.41 percent, at 12,952.07. The Standard &
Poor's 500 Index was down 6.50 points, or 0.47 percent,
at 1,365.68. The Nasdaq Composite Index was down 19.87
points, or 0.67 percent, at 2,966.89.	
    Global stocks, measured by the MSCI ACWI 
ended down 0.2 percent on the day but up 4.7 percent on the
month.	
    European stocks ended the session flat and the
month up 4 percent. 	
    Gold fell 5 percent to below $1,690 an ounce. For the
month, the precious metal ended down 2.5 percent, its second
decline in three months.	
    "It's just a pullback, it doesn't feel like it would be the 	
start of a bear market," said Jeffrey Sherman, commodities
portfolio manager of DoubleLine Capital, a Los Angeles-based
investment manager with $28 billion in assets.  	
    Oil prices ended up after a day of choppy trade. Brent crude
in London settled at above $122 a barrel, up 1 percent
on the day. February marked the best month in a year, with a 
10.5 percent gain after a rally fueled by supply-related
tensions in the Middle East. 	
    The dollar gained against the euro and yen. The euro 
fell as low as $1.3313 and last traded  down 1.1 percent at
$1.3318. Against the yen, the dollar hit a high of 81.31
before receding to 81.18, still up 0.9 percent for the day.	
    Bonds fell on Bernanke's remarks and as the ECB offered 530
billion euros in cheap three-year funds in a second round of
funding that the bank hopes will be its last major
crisis-fighting act. 	
    The benchmark 10-year U.S. Treasury note was down 9/32, with
the yield at 1.9722 percent.	
    "Bernanke basically didn't address the situation (of further	
stimulus) at all, and that combined with the end of the ECB 	
measures, caused markets to behave as if we were looking at the 	
end of additional liquidity measures," said John Briggs, 	
Treasury strategist at RBS Securities in Stamford, Connecticut. 	
    "Markets are trading as though they are recognizing a 	
temporary lull in the printing press."
A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

Find your dream retirement town

Florida? Hawaii? Reuters has teamed up with Zillow to give you the power to customize a list of your best places to retire.  Video | Full Article