* S&P 500 holds above 2,000, Dow hovers near record peak
* Euro bounces from 13-month low on report ECB may not act
* German Bund, euro bond yields reach record lows
(Updates market action)
By Richard Leong
NEW YORK, Aug 27 The euro rebounded from a
13-month low on Wednesday after a report suggested the European
Central Bank might not introduce more stimulus next week while
major U.S. stock indexes were little changed, with the S&P 500
hovering just above the 2,000 milestone.
Reuters in a report on Wednesday cited ECB sources who said
the bank is unlikely to embark on new policy measures at its
meeting next week unless August inflation figures due on Friday
signal the 18-nation block is moving closer toward deflation.
Traders said the report cooled earlier expectations of ECB
action at its Sept 4 meeting after ECB President Mario Draghi's
call for more policy action last week.
Bets that the ECB is on the brink of introducing a bond
purchase program to inject more stimulus into the euro zone
economy had earlier driven the euro to its weakest level against
the dollar in 13 months. The speculation also drove the region's
government bond yields to record lows and spurred a rise in
European share prices for a third day.
Among key commodities, Brent crude oil rose on reduced
supply from a large oil field in the North Sea due to additional
Gold climbed as the dollar retreated against a basket of
Investors were wary about piling into equities and other
risky assets after Ukraine accused Russian forces of a fresh
military incursion across its border.
"Global sovereign bonds and global equities are continuing
to rally together, which is clearly unsustainable in the short
term," said Michael Woolfolk, global markets strategist at BNY
Mellon in New York.
In midday trading, the Dow Jones industrial average
was up 8.4 points, or 0.05 percent, at 17,115.1, the S&P 500
was flat at 2,000.07, and the Nasdaq Composite
was 0.33 points, or 0.01 percent, lower at 4,570.30.
The pan-European FTSEurofirst 300 index
provisionally closed up 0.1 percent at 1,378.24 points. Tokyo's
Nikkei ended up 0.1 percent at 15,534.82.
The MSCI world equity index, which tracks
shares in 45 nations, rose 0.41 point, or 0.09 percent, to
Prior to the Reuters report that suggested the ECB might not
act next week, speculation of imminent ECB easing had
intensified on comments from Italy's economy minister, Pier
Carlo Padoan, who said Italy must lower its growth forecast for
this year, and on data showing a fall in German consumer
sentiment for the first time since early last year.
The yield on the benchmark German Bund was last
at 0.913 percent after earlier hitting a record low of 0.896
percent. Yields fell across the euro zone but were off earlier
The euro broke to an 13-month low of $1.3151 in Asian
trade on Wednesday before hitting a session high at $1.320, up
about 0.3 percent on the day.
The rebound in the euro weighed on the dollar index,
which was down 0.23 percent at 82.46.
As the greenback softened against major currencies, gold
clung to a 0.1 percent gain at $1,281.56 an ounce.
Brent crude was up 7 cents, or up 0.07 percent, at
$102.57 a barrel, while U.S. crude was last down 8 cents,
or 0.09 percent, at $93.78 per barrel.
(Additional reporting by Jamie McGeever, Nigel Stephenson, John
Geddie and Anirban Nag in London and Wayne Cole in Sydney;
Editing by James Dalgleish and Leslie Adler)