(Corrects JPMorgan reference in paragraph 9 to show it largest
* Dow's 10-day winning streak may come to a halt
* Dollar index retreats from seven-month high
* Reduced risk appetite boosts bond, gold prices
* Improving view on U.S. lifts Brent oil above $110/bbl
By Richard Leong
NEW YORK, March 15 Wall Street stocks fell on
Friday from near record levels as weaker bank shares led a pause
in the market's 10-day rally, while the dollar retreated from a
seven-month high despite more signs the U.S. economy is
With the pullback in U.S. stock prices, the Dow Jones
industrial average was in danger of ending its recent winning
streak, while European shares retreated from 4-1/2-year highs.
Investors shifted some money into safe-haven gold and U.S.
and German government debt ahead of the weekend.
Evidence of an improving U.S. economy, together with supply
concerns from the Middle East, boosted oil prices in London
briefly back above $110 a barrel.
As the U.S. jobs picture brightens despite tax increases and
government spending cuts, some analysts remain upbeat about the
longer-term prospects for stocks.
"If we do get a little bit of a retracement it's just a dip
and all these dips are being met by investors looking to buy any
kind of reversal they can get near," said Gordon Charlop,
managing director at Rosenblatt Securities in New York.
In addition to signs of the labor market picking up steam,
data on Friday showed continued growth in U.S. manufacturing,
although optimism was muted by news of a stronger-than-expected
0.7 percent rise in consumer inflation in February and a
surprise deterioration in consumer confidence. [IED:nL6N0C7C07]
The Dow Jones industrial average was down 38.13
points, or 0.26 percent, at 14,501.01. The Standard & Poor's 500
Index was down 1.83 points, or 0.12 percent, at 1,561.40.
The Nasdaq Composite Index was down 5.15 points, or 0.16
percent, at 3,253.78.
The S&P 500 came within about 4 points of its record closing
high on Thursday before falling on Friday on weakness in bank
shares, led by JPMorgan.
Shares of the largest U.S. bank by assets fell on news the
Fed told it and Goldman Sachs they must fix flaws in how
they set capital payouts to stockholders. In addition, a Senate
report alleged JPMorgan had ignored risks, misled investors,
fought with regulators and tried to work around rules as it
dealt with mushrooming losses in a derivatives portfolio.
Europe's broad FTSEurofirst 300 index provisionally
closed 0.43 percent lower at 1,202.65. But it recorded its fifth
weekly rise and is hovering near its highest levels since
Earlier, Tokyo's Nikkei index ended up 1.45 percent
on the day, rising for a five weeks in a row.
MSCI's all-world index, which tracks 9,000
stocks in 45 countries, was up 0.2 percent at 362.54. It was set
to rise for a second straight week.
Weaker stock prices increased the appeal of bonds and gold.
Benchmark 10-year U.S. Treasury notes were up 10/32
in price to yield 2.0017 percent, while German Bund futures
were 0.17 percent higher at 143.38.
Gold inched up 0.23 percent to $1,593.44 an ounce, on
its way to a weekly gain of 1 percent.
The dollar took a breather from its recent sprint higher,
slipping 0.51 percent to a one-week low against a basket of
major currencies. But it did reach the seven-month high
touched on Thursday.
The euro rose 0.45 percent to $1.3063, recovering
from Thursday's three-month low of $1.2911, and was on course
for a second consecutive weekly gain against the dollar.
Perceptions that U.S. inflation remains mild despite a spike
in gasoline prices earlier this year have eased fears the
Federal Reserve would need to consider an early exit from its
aggressive quantitative easing policy that has helped support
asset prices around the world.
"It looks like we still have some scope to continue with
QE," said Andrew Dilz, foreign currency trader at Tempus
Consulting in Washington.
In the oil market, crude prices drew strength from the
better U.S. economic outlook and concerns over supply from the
U.S. crude oil gained 37 cents to $93.40 a barrel
while Brent rose 82 cents a barrel to $109.78.
Supply worries resurfaced when President Barack Obama, ahead
of a visit to Israel next week, said military force remained an
option if sanctions and diplomacy failed to thwart Iran's
(Additional reporting by Chuck Mikolajczak, Wanfeng Zhou in New
York; Richard Hubbard, Clara Denina, Marc Jones and Marius
Zaharia in London; Editing by Peter Graff, Giles Elgood and Dan