Stocks retreat from 8-month high, dollar up

NEW YORK Tue Mar 27, 2012 4:56pm EDT

A man smiles as he talks on a mobile phone in front of an electronic monitor displaying share prices outside a brokerage in Tokyo March 14, 2012. REUTERS/Yuriko Nakao

A man smiles as he talks on a mobile phone in front of an electronic monitor displaying share prices outside a brokerage in Tokyo March 14, 2012.

Credit: Reuters/Yuriko Nakao

NEW YORK (Reuters) - World stocks were little changed after touching an eight-month high on Tuesday, while the dollar rose from the previous session's losses a day after the Federal Reserve signaled it would continue its loose monetary policy.

U.S. stocks closed near session lows after a more than 1 percent rally lifted the S&P 500 to a four-year high Monday, with a number of large-cap stocks at new 52-week highs as portfolio managers grabbed top performers near quarter-end. .N

The U.S. dollar strengthened against the euro and the yen after Fed Chairman Ben Bernanke's dovish comments sent it tumbling to multi-week lows in the previous session.

"Bernanke yesterday talked about the need for aggressive monetary policy and the dollar took a pretty good whack, so it's probably clawing some of that back," said Art Hogan, managing director of Lazard Capital Markets in New York.

Bernanke said Monday that accommodative monetary policy would stay in place to support demand and, over time, drive down long-term unemployment.

Asked on Tuesday about the potential for a new round of asset purchases by the Fed, Bernanke told ABC news the Fed does not take any options off the table and needs to be prepared to respond to however the U.S. economy evolves.

The S&P 500 is on track to close its best quarter since 2009 and its fourth straight month of gains. MSCI's main global stock index .MIWD00000PUS was up less than 0.1 percent after hitting its highest level since August 1.

Hogan said the Fed was only part of the equation behind stronger global equities. "We still believe there's a soft landing in China, Europe has stabilized and the U.S. continues to chug along at a sustainable rate," he said.

The Dow Jones industrial average .DJI ended down 43.90 points, or 0.33 percent, at 13,197.73. The S&P 500 Index .INX lost 3.99 points, or 0.28 percent, to 1,412.52. The Nasdaq Composite .IXIC closed down 2.22 points, or 0.07 percent, to 3,120.35.

The pan-European FTSEurofirst 300 .FTEU3 closed 0.5 percent lower as France's Total (TOTF.PA) fell 6 percent after it said a massive gas leak in a North Sea platform may take six months to halt.

U.S. dollar-denominated Nikkei futures rose 0.8 percent, boosted by the weakening yen.

A private sector report showed U.S. consumer confidence dipped in March but was nearly in line with forecasts, while inflation expectations rose to the highest in 10 months.

U.S. Treasuries prices rose, with the 10-year yield again below its 200-day average and at its lowest in two weeks.

The benchmark 10-year U.S. Treasury note was up 20/32, yielding 2.1818 percent.

The low interest rate environment contributed to record-setting dollar amounts of U.S. corporate note and bond sales this quarter.

Ahead of the quarter-end on Friday, data from Thomson Reuters unit IFR show $274.5 billion were priced in investment grade deals, eclipsing the previous record for a first quarter set in 2007 at $272.3 billion.

This is the best quarter ever for high-yield deals. At $88 billion, the amount beats the previous record of $85.3 billion set in the last quarter of 2010.

Crude futures prices zigzagged near break-even, with U.S. crude up 0.28 percent to settle at $107.33 per barrel and Brent down 0.09 percent at $125.54.

Gold was also little changed near two-week highs.

(Reporting by Rodrigo Campos; Editing by James Dalgleish and Dan Grebler)