* Stronger dollar weighs on gold, copper
* Brent bounces back from 5-month low
* Euro briefly dips to lowest level vs USD since late Feb
(Updates prices, changes comment)
By Rodrigo Campos
NEW YORK, April 3 The euro fell on Thursday
after the European Central Bank pledged to use unconventional
measures if needed to battle low inflation, and a global gauge
of stocks dipped after touching a six-year high.
Brent crude rallied more than 1 percent, bouncing from a
five-month low, on doubts a standoff in Libyan ports will be
The ECB, as expected, kept its main interest rate at a
record low of 0.25 percent and the rate for bank deposits at
central banks at zero, but comments from its president, Mario
Draghi, weighed on the single currency.
Draghi told a news conference that he and his colleagues
expected a period of low inflation, and that action would be
taken if it dragged on too long.
"The ECB is being slightly more dovish than the market
expected," said Kathy Lien, managing director at BK Asset
Management in New York. "The main takeaway is that the council
is considering unusual techniques, and that's negative for
On Wall Street, major stock indexes fell after the Dow and
the S&P 500 hit intraday record highs shortly after the open.
Reluctance to make big bets ahead of Friday's payrolls report
translated into profit taking in so-called momentum stocks, and
the Nasdaq Composite was hardest hit among main indexes.
U.S. data was mixed, with the services sector showing
growth, but some employment components flashed weakness. The
number of Americans filing new claims for unemployment benefits
rose more than expected last week.
Other data showed the U.S. trade deficit unexpectedly
widened in February suggesting weaker-than-anticipated
The Dow Jones industrial average fell 38.69 points or
0.23 percent, to 16,534.31, the S&P 500 lost 7.6 points
or 0.4 percent, to 1,883.3 and the Nasdaq Composite
dropped 58.677 points or 1.37 percent, to 4,217.779.
"Momentum names are usually the ones that take the quickest
hit when investors get anxious or worried, in this case, a bit
of hesitancy ahead of tomorrow's payrolls," said Randy
Frederick, managing director of trading and derivatives at the
Schwab Center for Financial Research in Austin, Texas.
Both the S&P and Dow hit intraday record highs.
MSCI's global equities gauge slipped 0.3
percent after touching its highest level since December 2007.
Overnight, MSCI's broadest index of Asia-Pacific shares
outside Japan touched its highest in more than
four months and Japan's Nikkei jumped 0.8 percent to a
BOND PRICES, DOLLAR FIRM
Longer-dated U.S. Treasuries yields edged lower after the
jobless claims data, causing some jitters ahead of Friday's
release of the government's nonfarm payrolls report for March.
"The reaction to the data might be more significant if we
didn't have a more important data print tomorrow," said Jake
Lowery, portfolio manager for global rates at ING U.S.
Investment Management in Atlanta.
Nonfarm payrolls probably increased by 200,000 in March, the
largest gain in four months, according to a Reuters poll of
The 30-year Treasury bond rose 18/32 in price to
yield 3.618 percent, compared to a yield of 3.649 percent late
on Wednesday. The benchmark 10-year U.S. Treasury note
was up 5/32 in price to yield 2.784 percent.
In Europe, France and Spain sold a combined 13.1 billion
euros of bonds on Thursday in auctions that drew strong demand
from investors, while Greece lined up a group of banks to manage
its first new bond sale since the country restructured its debt
two years ago. Benchmark Greek and Portuguese yields hit a
In currencies, the euro was last off 0.4 percent
against the dollar at $1.3709. Against the Japanese currency
, the dollar was little changed after earlier trading
above 104 yen for the first time since Jan. 23.
In commodities markets, gold and copper prices were weighed
by the strength in the greenback. Spot gold fell 0.3
percent to $1,285.30 an ounce, and three-month copper on the
London Metal Exchange was down 0.5 percent at $6,639.
Brent crude rose above $106 a barrel a day after hitting a
five-month low, as expectations of a deal to reopen vital Libyan
oil ports were balanced by doubts that a lasting resolution was
Brent rose 1.3 percent $106.13 a barrel, and U.S.
crude added 0.7 percent to $100.26 a barrel.
(Reporting by Rodrigo Campos; additional reporting by Anna
Louie Sussman, Sam Forgione, Michael Connor and Angela Moon;
editing by Leslie Adler and Chizu Nomiyama)