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GLOBAL MARKETS-Wall St steps back, euro recovers but vulnerable
February 11, 2013 / 3:30 PM / 5 years ago

GLOBAL MARKETS-Wall St steps back, euro recovers but vulnerable

* Wall St opens slightly lower after recent highs
    * Euro recovers from 2-week low, currency war talk increases
    * Brent crude slides under $118 a barrel
    * Most Asian financial centers shut for Lunar New Year

    By Leah Schnurr
    NEW YORK, Feb 11 (Reuters) - U.S. stocks faltered on Monday,
taking a breather after hitting multi-year highs, while the euro
recovered from a two-week low as talk of currency wars unnerved
    Encouraging U.S. and Chinese data last week helped push U.S.
equities higher, sending the tech-focused Nasdaq to a 12-year
closing high and the S&P 500 to a five-year peak. 
    With no major economic or corporate news on Monday,
investors were left with little reason to push the market
higher, for now. Federal Reserve Vice Chair Janet Yellen was due
to speak about the economic recovery at 1 p.m. (1800 GMT).
    Still, technical indicators are "looking very good" and
could give the market a floor, said Peter Cardillo, chief market
economist at Rockwell Global Capital in New York.
    He said the market will pay attention to Yellen's speech,
but he does not expect any deviation from her traditionally
dovish monetary policy stance.
    Shortly after the opening bell, the Dow Jones industrial
average was off 45.76 points, or 0.33 percent, at
13,947.21. The Standard & Poor's 500 Index was down 3.25
points, or 0.21 percent, at 1,514.68. The Nasdaq Composite Index
 was down 8.81 points, or 0.28 percent, at 3,185.06. 
    The benchmark 10-year U.S. Treasury note was
down 1/32, the yield at 1.9518 percent. 
    MSCI's world equity index was down 0.46
percent, and the pan-European FTSEurofirst 300 index 
fell 0.7 percent.
    Tensions over whether some countries are deliberately trying
to weaken their currencies were heightened, with French Finance
Minister Pierre Moscovici saying euro zone countries need closer
cooperation on exchange rate policy. He said the issue would be
discussed at a meeting of euro zone finance ministers later on
    The comments come after European Central Bank President
Mario Draghi suggested last week that further euro strength
could lead to an interest rate cut. French President Francois
Hollande has also urged the euro zone to set an exchange rate
    The Group of Seven major industrial nations may be about to
add its weight to the debate in an effort to cool the rhetoric.
Two G20 officials told Reuters the group was considering making
a statement this week reaffirming a commitment to
"market-determined" exchange rates. 
    G20 finance ministers and central bankers meet in Moscow on
Friday and Saturday.
    "The idea of being interventionist in currencies is not
particularly new. But at the moment, because some of the bigger
players are at the forefront, it feels like a much more pressing
issue for markets," said Daragh Maher, FX strategist at HSBC.
    The fear of competitive devaluations by major economies has
been building since new Japanese Prime Minister Shinzo Abe began
putting pressure on the country's central bank to take
aggressive easing measures to revive the nation's economy.
    The euro edged up 0.1 percent to $1.3369 as speculators
bought into the dip after the currency touched a two-week low of
$1.3325 earlier in Asian trade.
    Brent crude prices dropped below $118 a barrel as concern
about the euro zone economy eclipsed stronger-than-expected
demand growth in China. Trade data out of China had sent Brent
crude to a nine-month high on Friday.
    Trade was set to be limited this week as many Asian markets
are shut due to the Chinese New Year.
    Brent crude fell $1.27 to $117.63 a barrel, while
U.S. crude futures slipped 42 cents to $95.30.

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