May 13, 2014 / 7:25 PM / in 4 years

GLOBAL MARKETS-Wall St flat after hitting new highs; Europe shares rise

* Dow index climbs to new record despite soft data

* Key Europe index closes at 6-year high, buoyed by results

* Euro touches one-month low vs dollar on ECB outlook (Adds oil settlement prices, volume)

By Chuck Mikolajczak

NEW YORK, May 13 (Reuters) - U.S. stocks were little changed on Tuesday as the benchmark S&P 500 retreated slightly from an intraday record, while an index of European shares ended at a six-year high on solid corporate earnings and expectations of more European Central Bank stimulus.

Unexpected weakness in U.S. retail sales boosted U.S. Treasury prices. The benchmark 10-year note was last up 12/32 in price to yield 2.61 percent, down from 2.66 percent late Monday. Bond yields have remained lower than anticipated as inflation remains weak and the growth picture remains murky.

After setting a closing high on Monday, its ninth of the year, the S&P 500 rose to an intraday level of 1,902.17 despite the tepid U.S. retail sales data, which dampened hopes of a surge in economic growth in the second quarter.

“New highs are usually a bullish event but we’re not seeing news to really inspire people, so we’re holding in here,” said Michael O‘Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.

In late afternoon trading, the Dow Jones industrial average rose 24.55 points or 0.15 percent, to 16,720.02, the S&P 500 was up 1.83 points or 0.1 percent, to 1,898.48 and the Nasdaq Composite fell 5.41 points or 0.13 percent, to 4,138.45.

Volume was light with the session nearing its close, with about 3.91 billion shares traded on U.S. exchanges, on pace to finish below the 6.11 billion average so far this month, according to data from BATS Global Markets.


Sentiment in European equities was boosted by comments from two Bundesbank sources that the German central bank was prepared to support European Central Bank policy action, if needed, to shore up the region’s economy. This hit the euro, which extended losses against the dollar.

The euro fell to a trough of $1.3688, its lowest since April 7, on the ECB speculation. It was down 0.4 percent on the day at $1.3699, also hurt after the German ZEW survey of investor sentiment fell short of expectations.

The ZEW survey contributed to expectations the ECB will ease monetary policy further next month.

“We see the euro trading with a downward bias given the market is expecting some kind of easing from the ECB next month. It is still not clear whether it will do quantitative easing, but a rate cut is more likely,” said Yujiro Goto, currency strategist at Nomura.

The pan-European FTSEurofirst 300 index of the region’s biggest companies by market cap closed up 0.3 percent at 1,368.75, its highest level since May 2008, while Britain’s FTSE finished at a 14-1/2 year high.

The run of positive corporate news continued in Europe, with Germany’s ThyssenKrupp raising its full-year earnings outlook, while aerospace group Airbus Group reported better-than-expected profits and reaffirmed its financial goals for the year.

Oil prices continued their climb, as U.S. light crude oil settled up $1.11 at $101.70 a barrel, while Brent crude settled up 83 cents to $109.24. (Additional reporting by Blaise Robinson, Anirban Nag and Caroline Valetkevitch; Editing by Bernadette Baum, Dan Grebler and Meredith Mazzilli)

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