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- * Wall Street pares losses, European shares end lower * Dollar weakens after minutes suggest Fed ready to ease soon * Eurogroup chief keeps Greek extension hopes alive * Weak Japanese data adds to worries about global growth By...
Thu Aug 23, 2012 2:19am IST
* Wall Street pares losses, European shares end lower * Dollar weakens after minutes suggest Fed ready to easesoon * Eurogroup chief keeps Greek extension hopes alive * Weak Japanese data adds to worries about global growth By Wanfeng Zhou NEW YORK, Aug 22 (Reuters) - U.S. stocks recovered fromlosses to finish flat on Wednesday, Treasur y yields fell a nd thedollar tumbled broadly after Fe deral Reserve mi nutes suggestedthe c en tral bank m ight ease monetary policy further soon. The S&P 500 index fell early in the session on weak Japaneseexports data and uncertainty surrounding Greece, whose leadersmeet with European officials this week aimed at securing moretime to push through reforms. The Fed minutes from August said the U.S. central bank islikely to deliver another round of monetary stimulus "fairlysoon" unless the economy improves considerably. "This is quite a surprise, this announcement, and you areseeing the market react a bit favorably towards it," said TimGhriskey, chief investment officer of Solaris Group in BedfordHills, New York. The Dow Jones industrial average ended down 30.82points, or 0.23 percent, at 13,172.76. The S&P 500 Index finished up 0.32 point, or 0.02 percent, at 1,413.49. The NasdaqComposite Index closed up 6.41 points, or 0.21 percent,at 3,073.67. The MSCI global share index fell 0.3 percentto 325.65, o ff a session trough of 324.03. T he index hit itshighest level since early May on Tuesday. The Fed meeting took place before several recent encouragingU.S. economic reports. The movements by stocks and the dollarsuggest "the market is questioning if the improvement we'reseeing is 'substantial' enough for Chairman (Ben) Bernanke,"Quincy Krosby, market strategist at Prudential Financial inNewark, New Jersey, said. "I think he wants the (recently improving) economic data totranslate into private sector job creation," Krosby said."Overall, in general, you can see the dollar weakened, tellingyou the initial reaction from the markets is that it is soonerrather than later that the Fed will come in." European shares fell from a recent 13-month high, with theFTSEurofirst 300 index of European shares ending 1.2percent lower. Earlier, Japan said exports slumped the most in six monthsin July as shipments to Europe and China tumbled, adding toconcerns over global demand. U.S. Treasuries rallied after the Fed minutes , drivingyields to their lowest levels in over a week. U.S. benchmark10-year Treasury note yields fell 3 basis points to1.71 percent, the lowest level since Aug. 14. Chances the Fed will launch a third round of money printingh ave r isen slightly over the past month to 60 percent, accordingto a recent Reuters poll that also showed economists loweringeconomic growth expectations for this year and next.. Investors will now be closely scouring Fed Chairman BenBernanke's speech at the central bank's annual conference inJackson Hole, Wyoming, at the end of this month for signs ofwhether the bank will act in September. WEAKER DOLLAR The dollar fell 0.9 percent to 78.53 yen, while theeuro climbed 0.4 percent to $1.2516 after hitting a seven-weekhigh of $1.2538 on Reuters data. The dollar index, which tracks the greenback versus abasket of currencies, slipped 0.4 percent. Greek Prime Minister Antonis Samaras conferred withEurogroup chief Jean-Claude Juncker on Wednesday and asked thatGreece be given more time to accomplish austerity goals. Juncker appeared to keep the door open to an extension,saying a decision to grant more time would depend on a review bythe European Union and International Monetary Fund of Greece'sprogress. Samaras will also meet with German Chancellor Angela Merkeland French President Francois Hollande later this week. ButMerkel said there will be no decisions at Friday's meeting withGreece. Oil prices rose, bolstered by Fed easing hopes, a sharp dropin oil inventories and tropical weather threats. Brent crude ad vanced 27 c ents to se ttle at $1 14. 91. U .S. crude rose 42 cents to end at $97.26 per barrel. Platinum rose to a 3-1/2 month high after signs ofspreading unrest in top producer South Africa ignited concernamong investors over supply. Spot gold surged above$1,650 an ounce for the first time since early May.
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