বৃহস্পতিবার, ১৩ জুন, ২০১৩

Wall Street rallies on data; dollar falls versus yen

By Wanfeng Zhou

NEW YORK (Reuters) - Wall Street stocks rallied more than 1 percent on Thursday after stronger-than-expected U.S. economic data offset worries about a pullback in central bank stimulus, while the U.S. dollar slumped to a 10-week low against the yen.

The gains in U.S. equities followed a 6.4 percent drop overnight in Japan's Nikkei <.n225>, its second-biggest daily drop in more than two years. European markets lost more than 1 percent before recovering to end slightly lower.

U.S. retail sales rose more than expected in May and first-time applications for unemployment benefits fell last week, signs of economic resilience in the face of belt-tightening in Washington.

"The bright spot for the entire week was the data point today on U.S. retail sales. That data supports the notion that the U.S. consumer is moving forward with spending despite the uncertainty of Fed tapering," said Anastasia Amoroso, global market strategist at J.P. Morgan Funds in New York.

The Dow Jones industrial average <.dji> ended up 180.85 points, or 1.21 percent, at 15,176.08. The Standard & Poor's 500 Index <.spx> gained 23.84 points, or 1.48 percent, to 1,636.36. The Nasdaq Composite Index <.ixic> rose 44.94 points, or 1.32 percent, to 3,445.36.

Concern about a sooner-than-expected withdrawal of central bank support mounted after recent comments from Federal Reserve Chairman Ben Bernanke on the Fed's stimulus program and a decision by the Bank of Japan earlier this week to hold off on easing further.

The worries have fueled a selloff in global equities, emerging markets, risky bonds and commodities, all of which have been buoyed by central bank liquidity, while driving the safe-haven yen sharply higher.

The Federal Reserve meets next Tuesday and Wednesday. Some analysts said if the Fed does not hint at an imminent exit from its quantitative easing next week, the market could see a relief rally.

The MSCI All-Country World Index <.miwd00000pus> recouped losses to gain 0.3 percent at 362.92, still well off a five-year peak last month. European shares <.fteu3> closed 0.07 percent lower, reversing most losses as bargain-hunters picked up hammered mining and banking stocks.

An index of emerging market equities <.mscief> hit 11-month lows and was last down 0.8 percent. Most emerging currencies remained under heavy pressure, with the Indian rupee falling to a record low.

The dollar lost 0.8 percent to 95.26 yen as weakness in Japanese and emerging markets prompted investors to buy back the low-yielding Japanese currency, which is a favorite funding currency in these trades.

"This week's BOJ meeting, which offered no new policy initiatives or stimulus programs, was the catalyst for the rapid change in sentiment in the foreign exchange market," said Boris Schlossberg, managing director of foreign exchange strategy at BK Asset Management in New York.

The dollar fell as low as 93.78 yen, its lowest since April 4, giving back almost all the gains made since the Bank of Japan's aggressive monetary easing was announced on that day.

Losses in Japanese stocks also prompted foreign investors to unwind hedges they took out to protect themselves from the yen's recent slide. That also contributed to the yen's gain.

The euro lost 0.6 percent 127.23 yen, while against the dollar, it gained 0.2 percent to $1.3363.

Brent crude rose 76 cents to settle at $104.25 a barrel, having traded as low as $102.75 on reports indicating weak demand, including a cut in the outlook for global economic growth by the World Bank.

U.S. crude rose 81 cents to settle at $96.69 a barrel.

Spot gold fell slightly to $1,383.76 an ounce.

Investors headed for traditional safe-haven government debt. The benchmark 10-year U.S. Treasury note was up 25/32, the yield at 2.1381 percent. German government bonds had their biggest gains in a week.

The recent selling of euro zone periphery debt also resumed [ID:nL5N0EP0N4], and Italy's borrowing costs rose at an auction of three-year debt, although yields at a parallel 15-year sale were little changed.

(Additional reporting by Leah Schnurr, Angela Moon and Julie Haviv; Editing by Dan Grebler)

Source: http://news.yahoo.com/asian-shares-fall-dollar-pressured-fed-uncertainty-031622588.html

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