* S&P 500 retreats from record; bank profits disappoint
* U.S. dollar skids but uptrend seen intact
* Oil falls below $107 as supply outlook improves
By Angela Moon
NEW YORK, Jan 16 A measure of global equity
markets edged lower on Thursday, weighed by a decline on Wall
Street following a slew of disappointing bank earnings, while
the dollar fell, although the dip was viewed as temporary.
On Wall Street, the S&P 500 pulled back from record levels
as financial stocks led the way lower.
After a lackluster start to the new year on concerns stock
valuations may be over-extended, the S&P 500 had rallied
1.6 percent in the prior two sessions to set its first record
high since Dec. 31.
Given last year's 30-percent gain for the index, the market
does not need much of a catalyst for selling, said Uri
Landesman, president of Platinum Partners in New York.
"I think you could see a ratchet downward. It's pricing in
just a lot of rosiness and a lot of enthusiasm, and the odds are
that the news isn't going to be good enough to sustain that," he
The MSCI all-country world index was down
0.1 percent at 406.65.
The dollar fell against the euro and the yen, pressured by
data showing a jump in U.S. continuing jobless claims but losses
were viewed as temporary after two days of gains as the
greenback's uptrend remained intact.
Treasuries prices gained after inflation data came in as
expected and amid strength in German government debt and
overnight demand for safe-haven U.S debt.
Data showed U.S. consumer prices rose by the most in six
months in December but were in line with expectations, after
producer price data on Wednesday surprised some investors by
rising more than expected. That eased some inflation concerns,
while an unexpected drop in Australian employment boosted demand
for Treasuries overnight and as German bunds also rallied.
"Global inflation is very tame and not problematic, and
that's been a factor that's allowed yields to fall this year,"
said Kim Rupert, managing director for fixed income analysis at
San Francisco-based Action Economics.
Benchmark 10-year Treasuries were last up 11/32
in price to yield 2.845 percent, down from 2.884 percent late on
Wednesday. Thirty-year bonds gained 18/32 in price to yield
3.774 percent, down from 3.806 percent.
The dollar fell to 104.28 against the yen, erasing a
rebound that came after the greenback was battered by the
surprisingly weak December U.S. non-farm payroll report at the
end of last week. On Monday, the dollar fell to a four-week low
of 102.85 against the yen.
The Australian dollar, meanwhile, tumbled against the U.S.
unit to its lowest since August 2010 after a surprise fall in
Australian employment raised the possibility of another cut in
interest rates from the Reserve Bank of Australia.
BANKS WEIGH ON WALL ST
Financials were the biggest drag on Wall Street after both
Citigroup Inc and Goldman Sachs reported quarterly
profits hit by lower bond trading revenue, with Goldman's
earnings falling 21 percent and Citigroup's missing
The results followed fairly positive reads on the sector
from JPMorgan Chase & Co, Bank of America and
Wells Fargo & Co.
Goldman's stock slid 1.7 percent to $175.74 and ranked as
one of the Dow's biggest declines, while Citigroup dropped 4.1
percent to $52.74. The S&P financial sector index fell
0.7 percent, the biggest loser among the S&P 500 sectors.
"This group is very tied to the economy, and it makes it
difficult to argue that we could see a higher GDP ahead, given
these," said Paul Nolte, managing director at Dearborn Partners
in Chicago. "The earnings picture, along with some recent data,
suggests we haven't made it out of the very slow growth rate
that we've been seeing."
The Dow Jones industrial average was down 81.14
points, or 0.49 percent, at 16,400.80. The Standard & Poor's 500
Index was down 4.23 points, or 0.23 percent, at 1,844.15.
The Nasdaq Composite Index was down 0.12 points, or 0.00
percent, at 4,214.76.
European equities edged lower to steady just below a
5-1/2-year high, hurt by a string of losses in the retail sector
after corporate reports, though mining stocks offers some
In commodities markets, Brent crude oil fell below
$107 a barrel as expectations of more supply from the Middle
East and North Africa outweighed news of a large drop in U.S.
Huge volumes of crude from Iran and Libya have been blocked
by political and civil disputes, but both countries may soon be
able to send more into markets that are already well supplied.