* ECB predicts euro zone weakness, hitting euro, oil prices
* U.S. stock waver as 'fiscal cliff' talks weigh on
* Europe's FTSEurofirst 300 index up 0.4 pct, near 2012 high
By Herbert Lash
NEW YORK, Dec 6 U.S. shares edged higher on
Thursday, buffeted by the roller coaster reaction of investors
to U.S. budget talks, while the euro fell after the European
Central Bank said growth is likely to shrink next year, boosting
expectations of a rate cut.
Brent crude oil fell below $108 a barrel after comments by
ECB President Mario Draghi raised the prospect of further
weakness in the euro zone and a bleaker outlook for oil demand.
U.S. stocks edged higher in choppy trading as upbeat
guidance from Broadcom partly offset weakness in Apple shares.
But traders kept an eye on Washington and negotiations to avert
some $600 billion of tax hikes and spending cuts in January.
President Barack Obama takes his "fiscal-cliff" campaign to
the home of a family in northern Virginia to illustrate the
impact of letting taxes on the middle class rise as signs emerge
that Republicans are contemplating a change in strategy in their
battle with Democrats over deficit reduction.
"There are no real triggers here," said Rick Meckler,
president of hedge fund LibertyView Capital Management LLC, in
Jersey City, New Jersey.
"It's the back and forth over the fiscal cliff discussions,
the combination of people who are occasionally scared by the
language expressed by politicians and the value buyers who see
all this as a chance to get in at better prices."
The Dow Jones industrial average was up 20.35 points,
or 0.16 percent, at 13,054.84. The Standard & Poor's 500 Index
was up 3.06 points, or 0.22 percent, at 1,412.34. The
Nasdaq Composite Index was up 16.80 points, or 0.56
percent, at 2,990.50.
MSCI's all-country world equity index rose 0.2 percent to
333.70, while European stocks hit fresh 2012 highs and some
traders eyed more rallies after equity indexes broke key
The pan-European FTSEurofirst 300 index was up 0.69
percent at 1,131.83 after reaching an intraday peak of 1,132.79
points, its best level for 2012.
Benchmark German bonds rose and the euro fell after Draghi
said policymakers discussed a potential cut into negative
territory in the bank's overnight deposit rate.
Draghi did not elaborate further but his comments pushed the
euro down 0.63 percent to 1.2985.
The Bund future rose as much as 52 ticks on the day
to a session high of 145.62, driving 10-year German yields
to 1.30 percent, their lowest since late August.
The ECB's new staff projections put gross domestic product
in a range of falling by 0.9 percent to growing by just 0.3
percent next year, suggesting contraction is far more likely
U.S. benchmark Treasury yields dipped to near their lowest
in three weeks, supported by expectations the Federal Reserve
will announce a new bond purchase program when it meets next
The benchmark 10-year U.S. Treasury note was up
6/32 in price to yield 1.5704 percent.
Crude also faced pressure after a U.S. inventory report
showed big builds in oil products, with gasoline stocks up by
the highest margin since 2001, surging by 7.86 million barrels
to 212.12 million barrels in the week to Nov. 30.
U.S. crude futures fell $1.85 to $86.03 a barrel,
while Brent was down $1.29 at $107.52.