U.S. GDP data disappoints; euro and gold up
NEW YORK (Reuters) - The euro climbed to a 14-month high, gold rallied and longer- dated U.S. Treasuries pared losses on Wednesday after the Federal Reserve left its monthly $85 billion bond-buying stimulus plan in place.
The Fed said economic growth had stalled but indicated the pullback was likely temporary, describing the nation's job market as continuing its modest pace of improvement. It repeated a pledge to keep purchasing securities until the outlook for employment improves substantially.
A report earlier in the day showing the U.S. economy contracted in the fourth quarter had already bolstered expectations the Fed would continue its easy monetary policy.
GDP data, which showed the world's largest economy in the fourth quarter unexpectedly suffered its first decline since the 2007-09 recession, supported that expectation. Gross domestic product fell at a 0.1 percent annual rate after growing at a 3.1 percent clip in the third quarter.
"The key thing for investors is that liquidity remains in place. The market, after it digests this information, is likely to continue to buy the dips versus sell the rallies," said Dan Veru, chief investment officer at Palisade Capital Management, in Fort Lee, N.J.
The euro was last at $1.3574, with spot gold prices up $18.41, or 1.11 percent, to $1,681.80.
Easy U.S. monetary policy adds to the attractiveness of the euro. In recent years investors would buy the dollar as a safer haven on bad economic data, but at least on Wednesday, they saw the euro as a better bet.
The Dow Jones industrial average .DJI was down 29.49 points, or 0.21 percent, at 13,924.93. The Standard & Poor's 500 Index .SPX was down 3.96 points, or 0.26 percent, at 1,503.88. The Nasdaq Composite Index .IXIC was down 5.97 points, or 0.19 percent, at 3,147.69.
Brent crude oil reached its highest level in three and a half months as it passed $115 a barrel. It last traded at $114.90. U.S. light sweet crude oil rose 38 cents, or 0.39 percent, to $97.95 per barrel.
(Reporting by Nick Olivari; Editing by Dan Grebler)
- Tweet this
- Share this
- Digg this
- Rihanna, CBS bench opening number for Thursday football
- Apple iPhone 6 pre-orders hit record 4 million on first day
- Google launches $105 Android One; eyes low-price smartphone boom
- Coke, J&J join big corporations behind new employee wellness push
- Citing security threat, Obama expands U.S. role fighting Ebola
India will decide on ending government control on diesel pricing after elections in two states next month, an oil ministry source said, even though local prices of the fuel are currently higher than the global rates, making a case for a cut in retail prices. Full Article
India says to defend China border after standoff ahead of Xi visit. Full Article
Climate smart farmers get tech savvy to save India's bread basket. Full Article