Reuters: US Dollar Report: GLOBAL MARKETS-Signs of slowdown in U.S., Spain weigh on stocks, euro

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GLOBAL MARKETS-Signs of slowdown in U.S., Spain weigh on stocks, euro Apr 30th 2012, 19:16 Mon Apr 30, 2012 3:16pm EDT * World equity index on track for monthly loss of 1.5 pct * Spain joins list of euro zone nations in recession * Dollar falls to more than 2-month low below 80 yen By Wanfeng Zhou NEW YORK, April 30 (Reuters) - Global shares edged lower on Monday, heading for their first monthly loss this year as Spain sank into recession and the U.S. economy showed signs of slowing. Treasury prices rose, while the euro fell and the dollar slipped to a more than two-month low against the yen as anxiety over economies on both sides of the Atlantic led investors to favor lower-risk investments over stocks and other risky assets. Spain, the euro zone's fourth-largest economy, slipped into recession in the first quarter as domestic demand fell, joining Italy, Portugal, Ireland, Greece, Belgium and the Netherlands on the list of countries with shrinking economies. In the United States, consumers boosted spending only modestly last month and a gauge of Midwestern business activity fell sharply in April, suggesting the economy entered the second quarter with less steam. "Growth is beginning to fade around the world," said Justin Hoogendoorn, fixed income strategist at BMO Capital Markets in Chicago. The MSCI world equity index slipped 0.4 percent to 328.19. It was on track to post a monthly loss of 1.5 percent, though still up nearly 10 percent this year to date. On Wall Street, U.S. stocks slipped, with the S&P 500 falling below the technically significant 1,400 level and on track for its first monthly decline since November. The Dow Jones industrial average was down 46.54 points, or 0.35 percent, at 13,181.77. The Standard & Poor's 500 Index was down 8.64 points, or 0.62 percent, at 1,394.72. The Nasdaq Composite Index was down 24.86 points, or 0.81 percent, at 3,044.34. However, despite Monday's declines the picture was not overwhelmingly negative. Last week saw four days of back-to-back gains that helped the index erase steeper losses for the month. The S&P closed above 1,400 for the first time in three weeks on Friday, spurred by better-than-expected corporate earnings. "On the trading front, in equities, we stepped back to neutral several weeks ago," said Goldman Sachs in a research note. "Our general view is that the U.S. seems to be slowing - though how much and for how long is an open question - while equity market domestic growth views remain elevated." In the euro area, trading was light ahead of May Day holidays on Tuesday, elections in France and Greece at the weekend and a European Central Bank meeting on Thursday where policymakers will have to consider the region's worsening economic health. The FTSEurofirst 300 index of top European shares ended down 0.8 percent to 1043.28. Emerging market shares however, gained 0.4 percent. EURO ZONE STRESS The euro fell 0.1 percent to $1.3234, off a near one-month high of $1.3270 hit on Friday. It was on track for its worst month since December. Signs of a deepening euro-zone recession raised worries that governments could soften their approach to tackling budget deficits. Several countries in the region are under intense pressure to cut spending to help reduce their debt to sustainable levels. Growing opposition to austerity measures is expected to be a large factor in weekend elections in France and Greece after disputes about austerity brought down center-right coalition governments in the Netherlands and Romania last week. "In short, the news from Europe continues to point to further structural stress in the system," said Boris Schlossberg, director of FX research at GFT in Jersey City, New Jersey. The dollar lost 0.5 percent to 79.81 yen after falling as low as 79.71 yen, the lowest level since February. The pair was on track for its worst month since July 2011. The greenback briefly touched a two-month low against a basket of currencies at 78.638, its lowest since March 1, before recovering to 78.790, up 0.1 percent on the day. The benchmark 10-year U.S. Treasury note was up 7/32, the yield at 1.912 percent. In commodity markets, gold prices steadied above $1,660 an ounce on speculation of a third round of liquidity stimulus from the Federal Reserve. Brent June crude futures were down 32 cents to $119.51 a barrel. U.S. crude settled down 6 cents at $104.87 a barrel. Link this Share this Digg this Email Reprints

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