* Stronger dollar weighs on gold, copper
* Brent bounces back from 5-month low on doubts on Libya
* Euro briefly dips to lowest level vs USD since late Feb
(Updates to U.S. market close)
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 that a standoff in Libyan ports will
be resolved soon.
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
U.S. data was mixed, with the services sector showing
growth, while some employment components flashed weakness. The
number of Americans filing new claims for unemployment benefits
rose more than expected last week.
Friday's release of the government's nonfarm payrolls report
for March is expected to show 200,000 jobs were created last
month. If the estimate is met, it would be the highest gain
Other data on Thursday showed the U.S. trade deficit
unexpectedly widened in February, suggesting
weaker-than-anticipated first-quarter growth.
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.
"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.
The Dow Jones industrial average fell 0.45 point to
16,572.55, the S&P 500 lost 2.13 points, or 0.11 percent,
to 1,888.77, and the Nasdaq Composite dropped 38.716
points, or 0.91 percent, to 4,237.74.
MSCI's global equities gauge slipped less
than 0.2 percent after touching its highest level since December
2007. U.S. dollar-denominated Nikkei futures dropped 0.1
BOND PRICES, DOLLAR FIRM
Longer-dated U.S. Treasuries yields edged lower after the
jobless claims data caused some jitters ahead of Friday's
payrolls report and spurred a safety bid.
"The market had basically factored in a pretty good report,
and there was a rethinking of that view," said Anthony Valeri,
fixed income strategist at Boston-based LPL Financial.
The 30-year Treasury bond rose 15/32 in price to
yield 3.623 percent, compared to a yield of 3.649 percent late
on Wednesday. The benchmark 10-year U.S. Treasury note
was up 3/32 in price to yield 2.7935 percent.
In currencies, the euro was last off 0.2 percent
against the dollar at $1.3719, after hitting $1.3697, the lowest
level since Feb. 28.
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 0.2
percent to $1,286.80 an ounce, and three-month copper on the
London Metal Exchange was down 0.5 percent at $6,643.
Brent crude rose above $106 a barrel a day after hitting a
five-month low, as doubts persisted that a lasting deal was
imminent to reopen vital Libyan oil ports.
Though Libya's acting oil minister, Omar Shakmak, said on
Thursday there were "good intentions" that could see the
blockade end in days, analysts were cautious.
"The rebels have imposed conditions that are virtually
impossible to meet, demanding, for example, a referendum on
greater autonomy in the eastern provinces," Commerzbank said in
Brent rose 1.4 percent $106.25 a barrel, and U.S.
crude added 0.8 percent to $100.39 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)