* Stocks ease after tepid U.S. economic data; Treasuries
* Oil futures gain on initial reaction to Spain's debt sale
By Herbert Lash
NEW YORK, April 19 Global stocks traded near
break-even and government debt prices rose o n T hursday despite
solid demand for Spanish bonds as investors remained skeptical
about the country's fiscal outlook and softer-than-expected U.S.
economic data damped sentiment.
The number of Americans claiming unemployment benefits for
the first time fell only slightly last week, while factory
activity in the Mid-Atlantic region slowed sharply this month
and U.S. home resales fell for a second month in March.
Analysts said part of the data's weakness was payback after
an abnormally warm U.S. winter. But there was little doubt the
economy was losing some steam, leaving the door open for further
monetary stimulus from the Federal Reserve, a bullish sign for
The benchmark 10-year U.S. Treasury note was up
4/32, the yield at 1.9612 percent.
"The prospects for easing are on the table and are always
going to be on the table," said Sean Incremona, economist at
4CAST LTD in New York. "Euro zone worries, U.S. economy worries
-- it doesn't look like it's going to be a risk-on day."
The Dow Jones industrial average was down 28.42
points, or 0.22 percent, at 13,004.33. The Standard & Poor's 500
Index was down 3.11 points, or 0.22 percent, at 1,382.03.
The Nasdaq Composite Index was up 12.32 points, or 0.41
percent, at 3,043.77.
Spain sold 2.5 billion euros in two- and 10-year bonds, at
the top end of the targeted amount. Yields on the key 10-year
bond were higher, however, reflecting fears that Spain may miss
budget deficit targets, as well as concerns about its banking
Investors fretted about the higher yields demanded in the
auction and about a possible future credit rating downgrade for
France, where upcoming presidential elections pose an additional
Global stocks as measured by MSCI's all-country world equity
index fell 0.3 percent to 325.37.
The FTSEurofirst 300 closed down 0.5 percent at
1,040.79. Euro zone debt concerns sent the French CAC
down 2 percent and the Spanish IBEX off 2.2 percent
against a broadly flat British FTSE.
Italian, Spanish and French bond yield spreads widened over
benchmark German Bunds. Bund futures traded 30 ticks
higher on the day at 140.66, after hitting a record high of
"There are elections coming up in France, Spain has to nail
down its fiscal trajectory and Greece is in the melting-pot,"
said John Haynes, head of research at Investec Wealth &
"The outlook for European equities is pretty good at these
valuation levels if you are an investor rather than a trader. In
two years-plus you will probably make a lot of money out of
European equities. But... in the short term it is difficult to
see where the positive news will come from."
The euro initially tracked a rise in credit default swaps
and a widening of yield spreads between safe-haven German bunds
and debt issued by weaker countries like Spain and Italy.
But the euro rebounded after early declines, gaining
0.1 percent to $1.3136. The dollar was down against a basket of
major trading-partner currencies, with the U.S. Dollar Index
flat at 79.535.
New claims for unemployment benefits in the United States
fell last week, but from an upwardly revised number a week
earlier, the U.S. government said on Th ursday. New claims
totaled 386,000, above the Reuters consensus forecast of
U.S. Treasuries' prices rose on the higher-than-forecast
jobless claims, which appeared to fortify prospects for
accommodative monetary policy in the months ahead.
The benchmark 10-year note rose 6/32 on the
news, its yield easing to 1.95 percent.
Crude oil bounced off a two-month low set the previous
session after the Spanish bond auction. Brent June crude
gained 39 cents to $118.36 a barrel.
U.S. May crude rose 17 cents to $102.84 a barrel.