* Mixed US housing data takes edge off this year's stock
* MSCI world share index pares gains after hitting 4-1/2
* Oil falls on Saudi move to bolster supplies
* Dollar edges higher on perceived strength in housing data
By Herbert Lash
NEW YORK, Feb 20 Global equity markets faltered
on Wednesday as a mixed reading of U.S. housing data took the
edge off this year's stock rally, while oil prices fell as the
prospect of increased Saudi supply offset optimism spurred by an
improving worldwide economy.
A measure of world shares rose above a peak set in May 2011
to trade at highs last seen 4 1/2 years ago before paring gains.
But investors were cautious with the minutes from the Federal
Reserve's most recent meeting due for release later in the day.
MSCI's all-country world equity index hit a
session high of 359.37 before paring gains to trade at 358.48,
0.12 percent higher on the day.
Wall Street opened lower and the FTSEurofirst 300 index
index of top European shares was down 0.12 percent at
1170.34. The benchmark S&P 500 has gained more than 7 percent so
far this year, giving some investors pause.
U.S. residential construction fell in January but a jump in
permits for future home building to a 4-1/2 year high offered
hope the housing market recovery remains on track.
"Any sustained recovery will continue to be underpinned by a
recovery in housing, and the building permits suggests a slow,
grinding recovery. There will be fits and starts, but the
general trend is a positive slope, which bodes well for the
market," Steven Baffico, chief executive officer at Four Wood
Capital Partners in New York.
The Dow Jones industrial average was down 6.21
points, or 0.04 percent, at 14,029.46. The Standard & Poor's 500
Index was down 3.46 points, or 0.23 percent, at 1,527.48.
The Nasdaq Composite Index was down 8.39 points, or 0.26
percent, at 3,205.21.
Global equity markets have surged over the last seven months
as major central banks have repeatedly delivered support.
Details from the last Bank of England meeting showed its
policymakers were more inclined than had been thought for more
asset purchases under its quantitative easing (QE) program and
had even considered cutting interest rates.
Saudi Arabia, the world's top exporter of crude oil,
expects to raise its output in the second quarter to satisfy
higher demand from China and drive economic recovery elsewhere,
oil industry sources said, but the exact rise in volume was
April Brent crude futures were 57 cents down at
$116.95 a barrel after posting their first gain in four sessions
on Tuesday. U.S. crude fell 1 cent to $96.65. The
contract expires later on Wednesday.
U.S. Treasury debt prices eased, tracking falls in German
bonds after a weak auction, although the market was seen
range-bound before the release of minutes of the Federal
Reserve's January policy meeting later in the day.
The benchmark 10-year U.S. Treasury note was
unchanged in price to yield 2.0278 percent.
The dollar edged higher against the yen on the perception
the data showing an overall improvement in the U.S. housing
The decline in U.S. housing was due to the more volatile
multi-family component, analysts said, while the single-family
category rose to its highest since July 2008.
"Housing starts may have missed but they are still
relatively high compared to where we are in the cycle," said
Brian Kim, currency strategist, at RBS Securities in Stamford,
"Overall, I would say, housing starts and building permits
were generally constructive."