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GLOBAL MARKETS-Stocks little changed at 6-year high; euro slips
April 3, 2014 / 4:40 PM / 4 years ago

GLOBAL MARKETS-Stocks little changed at 6-year high; euro slips

* Stronger dollar weighs on gold, copper

* Brent bounces back from 5-month low

* Euro briefly dips to lowest level since late February

* ECB comments on combating inflation weigh on euro (Updates prices, adds comment, changes byline)

By Rodrigo Campos

NEW YORK, April 3 (Reuters) - The euro slipped on Thursday after the European Central Bank pledged to use unconventional measures if needed to battle low inflation, and a global gauge of stocks dipped after touching a six-year high.

The ECB, as expected, kept its main interest rate at a record low of 0.25 percent and the rate for bank deposits at central banks at zero, but comments from its president, Mario Draghi, weighed on the single currency.

Draghi told a news conference that he and his colleagues expected a prolonged period of low inflation, and if it dragged on too long, action would be taken.

“The ECB is being slightly more dovish than the market expected,” said Kathy Lien, managing director at BK Asset Management in New York. “The main takeaway is that the council is considering unusual techniques, and that’s negative for euro/dollar.”

On Wall Street, major stock indexes dipped after the Dow and the S&P 500 hit intraday record highs shortly after the open.

U.S. data was mixed, with the services sector showing growth, but employment components flashed weakness. The number of Americans filing new claims for unemployment benefits rose more than expected last week.

“The information we’ve gotten so far today is a little bit on the light side with respect to leading us towards bullishness, but not enough to make us run screaming ‘sell’ down the halls,” said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.

The Dow Jones industrial average fell 19.76 points, or 0.12 percent, to 16,553.24. The S&P 500 dropped 4.06 points, or 0.21 percent, to 1,886.84. The Nasdaq Composite lost 33.41 points, or 0.78 percent, to 4,243.05.

Both the S&P and Dow hit intraday record highs.

MSCI’s global equities gauge slipped 0.2 percent after touching its highest level since December 2007.

Overnight, MSCI’s broadest index of Asia-Pacific shares outside Japan touched its highest in more than four months and Japan’s Nikkei jumped 0.8 percent to a three-week peak.


Longer-dated U.S. Treasuries yields edged lower after the jobless claims data, causing some jitters ahead of Friday’s release of the government’s nonfarm payrolls report for March.

“The reaction to the data might be more significant if we didn’t have a more important data print tomorrow,” said Jake Lowery, portfolio manager for global rates at ING U.S. Investment Management in Atlanta.

Nonfarm payrolls probably increased by 200,000 in March, the largest gain in four months, according to a Reuters poll of economists.

The 30-year Treasury bond rose 20/32 in price to yield 3.615 percent, compared to a yield of 3.649 percent late on Wednesday. The benchmark 10-year U.S. Treasury note was up 7/32 in price to yield 2.777 percent.

In Europe, France and Spain sold a combined 13.1 billion euros of bonds on Thursday in auctions that drew strong demand from investors, while Greece lined up a group of banks to manage its first new bond sale since the country restructured its debt two years ago. Benchmark Greek and Portuguese yields hit a four-year low.

In currencies, the euro was last off 0.4 percent against the dollar at $1.3709. Against the Japanese currency , the dollar was little changed after earlier trading above 104 yen for the first time since Jan. 23.

In commodities markets, gold and copper prices were weighed by the strength in the greenback. Spot gold fell 0.2 percent to $1,287.30 an ounce, and three-month copper on the London Metal Exchange was down 0.6 percent at $6,636.

Brent crude rose above $105 a barrel a day after hitting a five-month low, as expectations of a deal to reopen vital Libyan oil ports were balanced by doubts that a lasting resolution was imminent.

Brent crude rose 0.9 percent $105.78 a barrel, and U.S. crude added 0.4 percent to $100 a barrel. (Reporting by Rodrigo Campos; additional reporting by Chuck Mikolajczak, Sam Forgione and Michael Connor; editing by Leslie Adler)

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