Reuters: US Dollar Report: GLOBAL MARKETS-Stocks, euro lower ahead of jobs data, ECB

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GLOBAL MARKETS-Stocks, euro lower ahead of jobs data, ECB May 2nd 2012, 19:34 Wed May 2, 2012 3:34pm EDT * Weak euro zone manufacturing, U.S. ADP weigh * Euro falls for 3rd day ahead of ECB meeting * German Bunds hit record high, Treasuries advance By Wanfeng Zhou NEW YORK, May 2 (Reuters) - Global stocks and the euro fell on Wednesday after data showed U.S. companies hired the fewest people in seven months in April and the euro zone's factory sector slipped further. The reports came a day after an index of U.S. factory activity posted its strongest growth rate in 10 months and sent the Dow Jones industrial average to its highest close in four years. The S&P 500 and the Dow declined as investors turned cautious ahead of Friday's U.S. nonfarm payrolls report for April, while Treasuries prices advanced on safe-haven demand. U.S. companies added only 119,000 jobs last month, well short of expectations of 177,000, a worrisome sign of a labor market that has struggled to gain traction. "If fewer and fewer people are participating in this recovery it suggests underlying weakness that we have to address, and so far policy makers' answers have been easy credit, I think we need to go beyond that," said Jack Ablin, chief investment officer, Harris Private Bank in Chicago. The report followed more discouraging economic news from Europe. Euro zone factories sank further into decline last month, with the downturn hitting Italy and Spain hard and appearing to take root among core members France and Germany. The Dow Jones industrial average was down 36.82 points, or 0.28 percent, at 13,242.50. The Standard & Poor's 500 Index was down 6.04 points, or 0.43 percent, at 1,399.78. The Nasdaq Composite Index was up 1.80 points, or 0.06 percent, at 3,052.24. The MSCI world equity index fell 0.4 percent to 328.05. European shares erased early gains, with the FTSEurofirst 300 ending down 0.4 percent. [ID: nL5E8G223R] ECB MEETING The euro fell for a third straight session against the dollar and was last down 0.6 percent at $1.3158. A rush to safety by investors pushed yields on German two- and five-year yields to record lows of 0.072 percent and 0.559 percent respectively. German Bund futures hit a record high of 141.69. The ECB meets on Thursday, with pressure growing on the bank to use bond buying and other measures to shield weaker euro members from additional pain. Expectations are also growing that the ECB may soon cut borrowing costs, eroding the euro's interest rate advantage. "The deterioration in the euro area data will increase the focus on tomorrow's ECB meeting as market participants focus on policymakers' outlooks and weigh the probability of a policy response," said Eric Theoret, currency strategist, at Scotia capital in Toronto. Elections in Greece and France this weekend added to fears of rising political uncertainty in Europe, which could push the euro below $1.30 in coming weeks. Against the yen, the dollar rose 0.1 percent to 80.12 yen . Oil prices dipped, pressured by data showed rising inventories as weak economic data from the United States and Europe dampened the demand outlook. Brent crude for June slipped $1.46 to settle at $118.20 a barrel and U.S. crude for June was down 94 cents to settle at $105.22. Gold retreated toward $1,653 an ounce but remained within its recent ranges as the mixed signals on global growth kept investors sidelined. Benchmark 10-year Treasury notes traded up 7/32 in price to yield 1.9207 percent. Link this Share this Digg this Email Reprints

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