Reuters: US Dollar Report: GLOBAL MARKETS-Stocks, euro trade flat, Spain dims sentiment

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GLOBAL MARKETS-Stocks, euro trade flat, Spain dims sentiment May 25th 2012, 15:35 Fri May 25, 2012 11:35am EDT * Markets turn skittish after Catalonia debt appeal * Euro briefly slips below $1.25, weighed down by Spain * Bond prices rise on safety bid, oil advances modestly By Herbert Lash NEW YORK, May 25 (Reuters) - Global stocks and the euro traded near break-even on Friday after an upbeat report on U.S. consumer sentiment offset investors' concerns about Spain's deteriorating finances and a possible Greek exit from the euro. The euro plumbed a fresh 22-month low against the U.S. dollar after the president of Catalonia, Spain's wealthiest region, said it is running out of options for refinancing more than 13 billion euro in debt that comes due this year. The euro briefly fell below $1.25 on trading platform EBS but pared losses to last trade down only 0.08 percent at $1.2527. But European stocks and oil prices rebounded after recent sharp declines. A report that showed U.S. consumer sentiment rising to its highest level in more than four years in May helped buoy sentiment in some quarters, leading U.S. stocks to pare some losses. The broad S&P 500 traded near break-even. The Thomson Reuters/University of Michigan's final reading on the overall index on consumer sentiment rose to 79.3 from 76.4 in April, topping forecasts for 77.8 and an initial May reading of the same. "Unfortunately, consumer confidence is still extremely vulnerable to a reversal, as occurred in the past two years," survey director Richard Curtin said in a statement. The Dow Jones industrial average was down 18.80 points, or 0.15 percent, at 12,510.95. The Standard & Poor's 500 Index was up 1.45 points, or 0.11 percent, at 1,322.13. The Nasdaq Composite Index was down 1.13 points, or 0.04 percent, at 2,838.25. In Europe, the FTSEurofirst 300 index rebounded, rising 0.2 percent to around 985. MSCI's all-country world equity index erased nearly all losses to trade 0.06 lower at 300.70. News of Catalonia's troubles came as Spain's Bankia SA is set to ask the state for a bailout valued at more than 15 billion euros ($19 billion), marking another rise in the cost of rescuing the country's fourth-biggest bank. Markets already were skittish over a possible Greek exit from the euro zone. Bonds prices rose in a bid for safety as investors prepare for what is likely to be volatile trading over the coming month. "The Catalonia news was a big deal because it implies that the Spanish government may have to take on more debt and it cannot afford to do so," said Richard Franulovich, senior currency strategist at Westpac Securities in New York. "For now, it's all about contagion," he added. The U.S. Dollar Index fell 0.02 percent at 82.329. The benchmark 10-year U.S. Treasury note was up 11/32 in price to yield 1.74 percent. Brent crude oil prices gained, supported by a lack of progress in talks with Iran over its nuclear program, returning investor focus to fears over supply if tension over the issue intensifies. Brent crude rose 38 cents to $106.92 a barrel. U.S. light sweet crude oil rose 37 cents to $91.03. Traders said the outlook is negative. "Europe is in a recession, China is slowing down and the United States is slowing down as well," said Michel Juvet, chief investment officer at Swiss bank Bordier & Cie. Link this Share this Digg this Email Reprints

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