* Dollar retreats from gains against euro and yen
* Equity markets decline on soft housing, labor data
* Bond prices rise on data, but Brent oil falls
By Herbert Lash
NEW YORK, May 16 Global equity markets traded
mostly flat and the dollar fell against the euro on Thursday
after reports on U.S. housing, labor and regional business
conditions pointed to soft spots in the American economy.
Factory activity contracted in the mid-Atlantic region in
May, ground-breaking for new homes tumbled in April and new
claims for jobless benefits spiked last week, according to three
Coupled with soft underlying inflation, the data suggests
weak demand as the U.S. economy entered the second quarter, and
it curbed expectations the Federal Reserve will scale back its
asset-buying program, which has bolstered the equity market.
"The dollar was on an uptrend headed into today's number,
mostly due to an optimistic view of the U.S. economy," said
Vassili Serebriakov, FX strategist at BNP Paribas in New York.
"The Fed has fallen short of its mandate on jobs and
inflation, so the data highlights the need for further
accommodation," he said.
Gold hit a four-week low and declined for a sixth straight
day for the first time in more than four years as investors
spooked by recent price falls favored other assets.
Spot gold prices fell $6.18 to $1,386.10 an ounce.
Ground-breaking for new U.S. homes plummeted more than
expected in April, the Commerce Department said, while the
Federal Reserve Bank of Philadelphia said its index of business
conditions in the U.S. Mid-Atlantic region fell.
The number of Americans filing new claims for unemployment
benefits climbed last week at the fastest pace in six months,
the Labor Department said, confounding analysts' expectations
for a more modest increase.
The dollar fell for the first time in six sessions against
the euro, which rose 0.02 percent against the dollar to
trade near $1.2889.
Major equity indexes traded near break-even, trimming
earlier losses, although the tech-heavy Nasdaq index was higher,
led by gains in Cisco Systems Inc.
Cisco shares surged 11.5 percent to $23.66 after the network
equipment maker posted a higher-than-expected quarterly profit
and said current-quarter revenue could increase.
The Dow Jones industrial average was up 0.46 point,
or 0.00 percent, at 15,276.15. The Standard & Poor's 500 Index
was down 1.36 points, or 0.08 percent, at 1,657.42. The
Nasdaq Composite Index was up 5.17 points, or 0.15
percent, at 3,476.78.
Other big tech gainers included Apple Inc, up 1.9
percent at $437.19; Hewlett-Packard, up 1.6 percent at
$21.31; and International Business Machines, up 1.3
percent at $205.87.
In other data, the U.S. Consumer Price Index posted the
biggest decline since December 2008, indicating inflation
pressure remains tame and giving the Fed latitude to maintain
its current monetary policy.
MSCI's world equity index fell 0.04 percent,
while the FTSE Eurofirst 300 index of top European
shares edged down 0.02 percent to close at 1,245.45.
U.S. Treasuries prices advanced and German Bund futures
jumped the most in six weeks as the U.S. data raised worries
about the economy and underscored the lack of price pressures.
The benchmark 10-year U.S. Treasury note was up
18/32 in price to yield 1.8757 percent. German Bund futures
jumped 67 ticks to settle at 145.31, its biggest daily
gain since March 27.
Oil prices rose but Brent oil futures remained below $104 a
barrel as the soft U.S. economic data added to a bearish outlook
Brent rose 9 cents to $103.77 a barrel, while U.S.
oil gained 53 cents to $94.83.