* S&P 500 hovers at 2,000, Dow ekes out record close
* Euro bounces from 13-month low on report ECB may not act
* German Bund yields reach record lows; oil, gold edge
(Adds quote, updates market prices)
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
clinging near the 2,000 milestone.
Reuters in a report on Wednesday cited ECB sources who said
the bank is unlikely to embark on quantitative easing (QE),
similar to what the bond purchases Federal Reserve has done, at
its meeting next week unless August inflation figures due on
Friday signal the 18-nation bloc is moving closer toward
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, reviving the euro and
lifting German bond yields from their earlier lows.
"The euro and Bund yields backed off their low levels after
a news story that the ECB may not announce QE at next week's
meeting," said Justin Lederer, a Treasury strategist at Cantor
Fitzgerald in New York. "But it's not like they are not expected
to do it at all even though it might not be next week."
Bets that the ECB is on the brink of injecting 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 straight
Among key commodities, Brent crude oil rose on reduced
supply from a large oil field in the North Sea due to additional
Gold firmed 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 new
military incursion across its border.
The Dow Jones industrial average closed up 13.45
points, or 0.08 percent, to 17,120.15, which would be a record
close. The S&P 500 was little changed at 2,000.10 and the
Nasdaq Composite dipped 1.02 points, or 0.02 percent, to
The pan-European FTSEurofirst 300 index closed up
0.1 percent at 1,378.19 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 0.46 point, or 0.1 percent, to
Prior to the Reuters report that suggested the ECB might not
act next week, speculation of imminent ECB easing had
intensified on downbeat growth comments from Italy's economy
minister Pier Carlo Padoan and data showing a deterioration in
German consumer sentiment for the first time since early last
The yield on the benchmark German Bund hit a
record low of 0.896 percent before finishing at 0.908 percent.
The euro broke to an 13-month low of $1.3151 in Asian
trade on Wednesday before hitting a session high at $1.3210, up
about 0.3 percent on the day. It was at $1.3196 in late New York
The rebound in the euro weighed on the dollar index,
which was down 0.26 percent at 82.44.
As the greenback softened against major currencies, gold
clung to a 0.1 percent gain at $1,282.42 an ounce.
Brent crude was up 22 cents, or 0.21 percent, at
$102.72 a barrel and U.S. crude settled up 2 cents, or
0.02 percent, at $93.88 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, Leslie Adler and Chizu Nomiyama)