GLOBAL MARKETS-U.S. stocks slip; ECB outlook shift hits sterling, yields
* BoE in no rush to raise rates; sterling hits 1-month low vs dollar * Sources say ECB preparing rate cut, other measures next month * Lower rate outlook fails to lift European shares (Adds opening of U.S. markets; changes byline, dateline, previous LONDON) By Chuck Mikolajczak NEW YORK, May 14 (Reuters) - Benchmark government bond yields in the U.S. and Germany fell sharply on Wednesday after sources told Reuters a European Central Bank rate cut next month is "more or less a done deal," while U.S. stocks edged off recent record highs. Euro zone sources said the ECB plans a package of policy options, including measures aimed at boosting lending to small- and mid-sized firms. The ECB's dovishness has helped hold down yields on German and U.S. debt, though the expectation is that stronger U.S. growth will boost those yields over time. Ten-year Bund yields hit a one-year low of 1.38 percent while the 10-year Treasury note's yield fell to 2.54 percent, the lowest since October. UK yields also fell after the Bank of England said it was in no hurry to raise rates. "It reinforces the notion that from a global perspective monetary policy is committed to lower (rates) for longer," said Ian Lyngen, a senior government bond strategist at CRT Capital in Stamford, Connecticut. Bonds were rallying even as U.S. wholesale prices increased 0.6 percent in April, the most in 1-1/2 years. The S&P 500 edged lower after setting its most recent record closing high. Energy was the only group of the 10 major sectors to advance, as oil continued its climb on continued fighting in Ukraine. U.S. crude oil rose 59 cents to $102.30 a barrel, while Brent crude gained 51 cents to $109.75. Sterling fell to a one-month low against the dollar after the BoE said it was in no rush to raise rates and that Britain's economic recovery is still in its early stages. Sterling backed off a 16-month high against the euro. The euro was up 0.4 percent against sterling at 81.72 pence . Sterling was down 0.3 percent against the dollar at $1.6778 , while UK gilt yields fell to as low as 2.60 percent . MSCI's all-country world index barely budged at 417.56 after reaching a high of 418.24, its highest level since November 2007. The Dow Jones industrial average fell 34.39 points or 0.21 percent, to 16,681.05, the S&P 500 lost 2.26 points or 0.12 percent, to 1,895.19 and the Nasdaq Composite dropped 1.78 points or 0.04 percent, to 4,128.39. The FTSEurofirst 300 index of leading European shares was down a quarter of one percent at 1365 points, hovering close to Tuesday's six-year high. The FTSEurofirst 300 has risen some 7 percent from lows in March. (Additional reporting by Blaise Robinson in Paris and Karen Brettell in New York; Editing by Susan Fenton and Meredith Mazzilli; To read Reuters Global Investing Blog click here; for the MacroScope Blog click on blogs.reuters.com/macroscope; for Hedge Fund Blog Hub click on blogs.reuters.com/hedgehub)
- U.S. nurse quarantined over Ebola criticizes her treatment |
- Suspect in two California deputy deaths charged with murder, carjacking
- Washington state teen shooter's family living in 'nightmare'
- Iraqi security forces and Kurds gain ground against Islamic State
- Police seek motive in fatal Washington state school shooting