* Turmoil in emerging markets eases, Russia pledges to back
* Safe-haven gold, U.S. Treasuries fall after U.S. GDP
* U.S., European stocks rebound, emerging markets also turn
By Herbert Lash
NEW YORK, Jan 30 The dollar strengthened and
global equity markets rebounded on Thursday after data showed
the U.S. economy with plenty of momentum in the last quarter of
2013, boding well for continued growth and support for corporate
The initial reading of 3.2 percent gross domestic product
growth for the fourth quarter, combined with the 4.1 percent
pace in the third quarter, resulted in the biggest half-year
increase since the second half of 2003.
The strong GDP number, in line with economists'
expectations, led equity markets in Europe to turn around and
stocks on Wall Street to open higher. The dollar rose against a
basket of currencies and revived the appeal of the greenback
against the safe-haven yen and Swiss franc.
Turmoil in emerging markets also eased, as the Turkish lira
and South African rand rebounded. Russia's central
bank pledged unlimited foreign exchange interventions if the
rouble strays outside its target range.
Emerging market currencies have been pressured ever since
the U.S. Federal Reserve said it would begin to trim its massive
bond buying, a program that has injected money into the U.S.
economy and bolstered markets around the world.
"There's a lot of concern over what's happening overseas but
in the domestic (U.S.) market GDP was pretty strong," said Cam
Albright, director of asset allocation at Wilmington Trust
Investment Advisors in Wilmington, Delaware. "If you see growth
in the economy pointing to higher earnings growth, that will
give markets more confidence in the United States."
The Fed, as expected, said on Wednesday it will cut its
monthly bond purchases by $10 billion in February to $65 billion
as policymakers saw less need for stimulus through the
quantitative easing program.
"The end of QE is an indication the economy is getting
better, though I'm not sure the market has entirely transitioned
to that idea yet," Albright said.
The dollar was up 0.71 percent against a basket of
currencies at 81.080.
The euro fell 0.78 percent against the dollar at
$1.3556, while against the yen, the greenback was up 0.37
percent at 102.66.
U.S. and European stock indexes were higher, while a measure
of global equity markets, MSCI's all-country world index
also rebounded, rising 0.1 percent. MSCI's
emerging markets index, however, was down 0.15
On Wall Street, the Dow Jones industrial average rose
100.99 points, or 0.64 percent, at 15,839.78. The Standard &
Poor's 500 Index was up 17.54 points, or 0.99 percent, at
1,791.74. The Nasdaq Composite Index was up 69.43
points, or 1.71 percent, at 4,120.87.
In Europe the pan-regional FTSEurofirst 300 index
of leading companies was up 0.2 percent to 1,292.87.
Gold fell more than 2 percent as the robust U.S. growth data
and the Fed's decision on Wednesday to further trim its
bond-buying boosted the dollar and prompted traders to cash in
gains in the yellow metal.
U.S. gold futures for February delivery were down
$21.60 an ounce at $1,240.60.
Brent oil rose to around $108 per barrel and U.S. crude
reached its highest in a month on bitter cold in the United
States, which has boosted heating oil demand.
Brent crude was up 32 cents to $108.17 a barrel.
U.S. crude was up $1.02 at $98.38.
The U.S. bond market retreated following Wednesday's rally,
but some of the money leaving equities found its way into the
developed world's government bond market.
German Bund futures rose 30 ticks to 143.20, while
German 10-year yields fell to 1.62 percent, their
lowest in nearly six months.
Benchmark 10-year Treasury notes were last down
12/32 in price to yield 2.7186 percent.