* European shares slip, led by banks
* Stronger-than-expected U.S. retail sales data adds
* Cut in Fed stimulus could come as early as next week
By Herbert Lash
NEW YORK, Dec 12 The dollar rose and global
equity markets slipped to a one-month low on Thursday after
stronger-than-expected U.S. retail sales data added to jitters
about when the Federal Reserve will start trimming its stimulus.
The Commerce Department said retail sales increased 0.7
percent in November as Americans bought automobiles and a range
of other goods. The increase was the largest in five months and
followed a 0.6 percent rise in October.
Bond traders trimmed their holdings on the view the solid
retail sales data suggested a strengthening economy that could
draw the Fed closer to reducing the pace of monetary stimulus.
"It puts in question the belief about the tapering early
next year," said Thomas Roth, executive director of U.S.
government bond trading at Mitsubishi UFJ Securities in New
York, about retail sales.
"It also raises the possibility a rate hike might happen
sooner rather than later," Roth said.
According to a Reuters poll released on Wednesday, 32
economists expected the Fed to begin to taper in March, while 22
said it would scale back in January. Only 12 economists expected
a tapering announcement next week when Fed policy-makers hold
their last meeting of the year.
MSCI's all-country world equity index, which
tracks shares in 45 countries, fell 0.58 percent to a one-month
low. The pan-European FTSEurofirst 300 of leading
regional shares hit a two-month low after a surprise fall in the
euro zone's industrial output in October.
The index closed down 0.93 percent at 1,244.66
Banking shares were among the biggest losers, with HSBC
Holdings Plc, closing down 0.4 percent at 646.2 euros,
and Banco Santander SA off 1.45 percent at 6.059 euros.
Euro zone industrial production dropped 1.1 percent, the
biggest monthly decline since September 2012, indicating
weakness in the bloc's recovery. Data from EU statistics agency
Eurostat support the case for further central bank stimulus.
Stocks on Wall Street were mostly lower, but the Nasdaq eked
out a gain on Facebook, whose stock rose 5.29 percent to
$51.99, after Standard & Poor's announced Wednesday the social
media giant will join the S&P 500 stock index.
Facebook was the most active stock on Nasdaq.
The Dow Jones industrial average fell 50.51 points,
or 0.32 percent, to 15,793.02. The S&P 500 lost 0.3
points, or 0.02 percent, to 1,781.92 and the Nasdaq Composite
added 8.388 points, or 0.21 percent, to 4,012.201.
Lululemon Athletica Inc shares fell more than 11
percent to $60.78 after the company said it expects flat
same-store sales in the crucial fourth quarter.
The dollar gained across the board.
"The strong U.S. retail sales number was definitely a
positive factor for the dollar. This could lead to some upward
revisions in the gross domestic product for the fourth quarter,"
said Brian Dangerfield, currency strategist at RBS Securities in
The dollar index, which tracks the dollar against six
major currencies, rose 0.36 percent to 80.183 after three days
The euro fell 0.29 percent against the dollar to $1.3745
, ending a seven-day winning streak. It has gained nearly
4 percent since Nov. 11 and is close to its 2013 peak of
The dollar advanced 0.81 percent versus the yen to 103.25
yen, after two days of losses. The euro also gained
against the yen, up 0.49 percent at 141.91 yen.
Brent oil futures fell below $109 a barrel on the possible
reopening of major Libyan ports this weekend and expectations
that the Fed may soon unwind a stimulus program.
"Overall it's bearish risk," Olivier Jakob at Petromatrix
consultancy in Switzerland said. "The odds of the tapering
timeline being announced at this meeting seem a bit more
Brent crude oil fell $1.03 to settle at $108.67 a
barrel. U.S. crude futures for January delivery settled
up 6 cents at $97.50 a barrel.
U.S. government bond prices fell, with the 10-year note
down 9/32 to yield 2.8773 percent.
Bund futures settled down 20 ticks at 140.10 euro.