July 12, 2013 / 2:30 PM / in 5 years

GLOBAL MARKETS-Dollar bounces back from sell-off; stocks flat

* Euro shares edge up, world stock index flat
    * Dollar bounces, currencies steadier after wild ride
    * U.S. stocks open slightly higher

    By Caroline Valetkevitch
    NEW YORK, July 12 (Reuters) - World stock indexes were
nearly flat on Friday, pausing after recent sharp gains and as
focus shifted to U.S. corporate earnings, while the dollar
bounced from its steep sell-off.
    U.S. stocks opened slightly higher, a day after the Dow and
S&P 500 hit all-time closing highs. Focus turned to earnings
results from top U.S banks including JP Morgan and Wells
Fargo, both of which reported higher-than-expected
    "We'll go a little bit higher, consolidate gains, maybe take
a little profit going into the weekend and investors are going
to sit back and wait for the tidal wave of earnings next week,"
said Fred Dickson, chief market strategist, D.A. Davidson & Co.
Lake Oswego, Oregon.
    European shares edged up as investors shrugged off some
caution in Asia after China's finance minister doused hopes of
fresh stimulus, saying growth of below 7 percent was acceptable
for Beijing. 
    Stocks, bonds and commodities have rallied this week on
hints from U.S. Federal Reserve Chairman Ben Bernanke that the
U.S. central bank may not be as eager to phase out its support
as markets had started to believe.  
    The broad FTSEurofirst 300 was up 0.2 percent,
while MSCI's world index was flat, though was
track to post its best week since January.
    The Dow Jones industrial average was up 11.29 points,
or 0.07 percent, at 15,472.21. The Standard & Poor's 500 Index
 was up 0.22 points, or 0.01 percent, at 1,675.24. The
Nasdaq Composite Index was up 3.28 points, or 0.09
percent, at 3,581.58. 
    After a week of swings in the world's big currencies,
foreign exchange markets were trading in a calmer fashion.
    The dollar index, which plots the greenback's
performance against a basket of major currencies, was up 0.4
percent after having slumped more than 2 percent since Bernanke
on Wednesday assured the central bank would remain in support
    That was the steepest fall in four years, normally seen only
during financial crises.
    "There is some argument for suggesting that the shock effect
of a dovish Bernanke has largely been digested," said Alan
Ruskin, global head of foreign exchange strategy at Deutsche
Bank in New York.
    The Thomson Reuters/University of Michigan's consumer
sentiment index showed the preliminary reading was slightly
weaker than expected in July, causing the dollar to pare gains
    Portuguese government bonds fell again after
Lisbon requested a delay to the next review of the country's
bailout programme due to its political crisis.
    Tensions were reignited this week after the country's
president threw out plans that looked to have patched up a
government rift and instead demanded some kind of grand
coalition. That would include opposition Socialists, who are
distinctly cool on the government's austerity and have been
calling for snap elections.
    Commodity markets have also enjoyed a strong run this week
as the talk of continuing central bank support has bolstered
hopes of a pickup in global growth.
    Gold fell as the dollar rebounded and investors booked
profits after four days of gains, but was on track for its
biggest weekly gain since April.
    Spot gold fell 1 percent to $1,272.01 an ounce by
1156 GMT. Bullion has gained 3.8 percent this week, on course
for its biggest weekly climb since April 20, after hitting a
near-three week high of $1,298.36 on Thursday. Analysts said the
metal now faces strong resistance crossing the $1,300 level.
    Brent oil was up 47 cents at $108.20, while U.S.
crude oil was up 37 cents at $105.28 a barrel.
    In the U.S. bond market, the benchmark 10-year note was up
11/32, with the yield at 2.5295 percent.
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