* World stocks index at record peak, Europe fades
* U.S. dollar bounce loses steam on profit taking
* Wall Street pulls back as banks lag
(Updates with U.S. market open; changes byline, dateline;
By Chuck Mikolajczak
NEW YORK, Feb 16 A gauge of major world equity
markets scaled a fresh record on Thursday, boosted by rosy
global data, while U.S. bond prices received a lift from a drop
in the dollar.
MSCI's All-Country World index hit an
intraday record for a second straight session, although stocks
on Wall Street dipped as the financial sector lost
ground for the first time in five sessions.
Data reports showed improvements in exports from Indonesia
and Taiwan, along with falling unemployment in Sweden and the
In the United States, manufacturing activity in the
Mid-Atlantic region surged to its highest in 33 years, housing
data indicated a recovery in the sector was on track, and weekly
jobless claims pointed to a labor market that continues to
Still, U.S. equity indexes pulled back after touching
another record high, with the benchmark S&P 500 modestly lower
after notching its longest winning streak in nearly four years.
The Dow Jones Industrial Average fell 21.73 points,
or 0.11 percent, to 20,590.13, the S&P 500 lost 6.29
points, or 0.27 percent, to 2,342.96 and the Nasdaq Composite
dropped 13.16 points, or 0.23 percent, to 5,806.28.
MSCI's benchmark global equity index edged up 0.09 percent
to 444.08 points, after touching a record high of 444.94.
Europe's index of leading 300 stocks was 0.4 percent
The dollar, off 0.7 percent, weakened against a
basket of major currencies, retreating further from a one-month
high on uncertainty about the timing of the next interest rate
hike from the U.S. Federal Reserve.
"The dollar rally that preceded (Fed Chair Janet) Yellen's
testimony wasn't given more fuel so we are seeing that move
fade," said Richard Scalone, co-head of foreign exchange at TJM
Brokerage in Chicago.
Expectations for a rate hike from the Fed in March rose as
high as 31 percent after hawkish comments from Chair Janet
Yellen on Tuesday, but fed funds futures now imply
traders see a 22 percent chance of a hike next month.
The fall in the dollar helped bond prices rally, along with
the upbeat economic data. Benchmark 10-year notes
were last up 16/32 in price to yield 2.4467 percent, down from
2.50 percent late on Wednesday.
"We've been following the dollar index kind of tick for
tick. When the dollar strengthens, U.S. Treasuries sell off,
when the dollar weakens, they rally," said Dan Mulholland, head
of Treasuries trading at Credit Agricole in New York.
In commodity markets, oil prices retreated from an early
advance spurred by speculation OPEC could extend its production
Brent was last off 0.8 percent at $55.31, after
climbing as high as $56.24 a barrel while U.S. crude was last
down 0.4 percent after touching a session high of $53.59.
Gold was the beneficiary of the weaker greenback, up
0.7 percent to $1,240.25 an ounce.
Copper lost 1.2 percent to $5,992 a tonne after
China's overseas investment weakened and sentiment waned over
demand in the world's top copper user.
(Additional reporting by Richard Leong and Karen Brettell;
Editing by Bernadette Baum)