U.S. stocks rise, push Dow to record; euro slips on ECB view

NEW YORK Fri May 9, 2014 5:18pm EDT

1 of 6. Traders work on the floor of the New York Stock Exchange April 11, 2014.

Credit: Reuters/Brendan McDermid

Related Topics

NEW YORK (Reuters) - Wall Street's blue chips set a record close in a lackluster session on Friday while the U.S. dollar strengthened against the euro and Japanese yen after the European Central Bank signaled it could deliver fresh monetary stimulus next month.

Global equity markets eased after two key indexes hit record peaks on Thursday, but U.S. markets were lifted by growth stocks such as Facebook Inc (FB.O), Priceline Group Inc (PCLN.O), Google Inc (GOOG.O) and Amazon.com Inc (AMZN.O).

Major U.S. indexes ended the week near their levels of the start of the year. The benchmark S&P 500 is up less than 2 percent for the year and has traded roughly within a 35-point range for two months. The Nasdaq is 2.5 percent lower and the Dow only slightly higher.

"The volatility and the decline in a lot of growth stuff is wearing people out," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles. "There's a lot of trader fatigue."

The Nasdaq has dropped for three straight sessions in its longest losing streak since early April.

Rick Meckler, president of hedge fund LibertyView Capital Management in Jersey City, New Jersey, said investors are trying to gauge if so-called momentum stocks, whose share prices have been on a roller coaster in recent weeks, will finally stop.

"There's some fear among investors that their steep fall-offs are a precursor of something to the broader market, and when they rebound, even temporarily, it seems to give confidence to the overall market," Meckler said.

The Dow Jones industrial average .DJI closed up 32.37 points, or 0.2 percent, at 16,583.34, the S&P 500 .SPX gained 2.85 points, or 0.15 percent, to 1,878.48 and the Nasdaq Composite .IXIC added 20.374 points, or 0.5 percent, to 4,071.869.

Facebook rose 0.85 percent to $57.24, Priceline climbed 2.5 percent to $1,135.91, Google added 1.5 percent to $518.73 and Amazon.com gained 1.36 percent to $292.24.

MSCI's all-country world index .MIWD00000PUS fell 0.2 percent after advancing to its highest since November 2007 on Thursday.

In Europe, the pan-European FTSEurofirst 300 index .FTEU3 slipped 0.26 percent to close at 1,355.40, after hitting its highest level since May 2008, also on Thursday.

The euro lost ground after ECB President Mario Draghi gave his clearest signal yet that policymakers might act in June to stem slowing inflation and bolster a fragile economic recovery.

Italian, Spanish and Irish borrowing costs fell to record lows on the prospect the ECB could embark on an asset purchase program if inflation remained persistently low.

The euro fell 0.59 percent to 1.3758 against the dollar. The dollar basket .DXY rose 0.63 percent and against the yen the dollar gained 0.14 percent to 101.79.

John Doyle, currency strategist at Temps Inc in Washington, said the euro's fall from Thursday eased a bit and that Draghi has tried in the past to talk down the currency's strength.

"Until the ECB actually acts, I don't see a sustained rally in the dollar. The market has been calling Draghi's bluff."

U.S. crude futures were range bound as support from a drawdown in domestic crude stockpile offset technical sell points. Brent crude was lower.

Brent for June settled down 15 cents at $107.89 a barrel. U.S. oil settled down 27 cents at $99.99.

Gold fell, pressured by the euro's sharp decline from a 2-1/2 year high. U.S. COMEX gold futures for June delivery settled down 10 cents an ounce at $1,287.60.

U.S. Treasuries drifted lower as the 30-year long bond again surrendered price gains after an unexpectedly costly $16 billion government auction of new 30-year debt.

Yields on 30-year Treasuries stood at 3.4676 percent, reflecting a price decline of 20/32. The benchmark 10-year note fell 6/32 to yield 2.6233 percent.

(Additional reporting by Francesco Canepa in London; Editing by Andrew Hay, Andre Grenon and Dan Grebler)

FILED UNDER:
We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (4)
Willvp wrote:
Angle of view is changed by author: “if updated inflation forecasts merit it”

I don’t recall Draghi saying it like that, he didn’t mention “inflation Forecasts” and “merit it”.

May 09, 2014 10:02am EDT  --  Report as abuse
boreal wrote:
Is Russia’s rich nickel deposit worth the trouble to democratically liberate it?

May 09, 2014 11:50am EDT  --  Report as abuse
AZWarrior wrote:
As we watch the “Battle of the Fiat Currencies”, one is reminded of the old joke about the two people arguing over how best to get away from a charging lion. A third gentleman who had remained silent was asked to settle the argument and choose which method had the better chance of success. He replied that neither method was necessary as one only had to run faster that the other person being chased to survive. Today one only has to possess the least damaged currency to succeed.

May 10, 2014 6:01pm EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.