Reuters: US Dollar Report: GLOBAL MARKETS-Worlds stocks, oil down after weak data, US dollar up

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GLOBAL MARKETS-Worlds stocks, oil down after weak data, US dollar up Jun 21st 2012, 14:32 Thu Jun 21, 2012 10:32am EDT * Global stocks weaker on China, Europe and US data * Oil falls after Fed decision, China data * Spain's borrowing costs rise * U.S. stocks dip on Philly Fed data NEW YORK, June 21 (Reuters) - Stock on major markets fell and crude oil prices slumped on Thursday after data showed Chinese, European and U.S. manufacturing activity slowing further, just a day after the Federal Reserve extended its monetary stimulus program due to a weakening U.S. economic recovery. The U.S. dollar rose against the euro and yen as the Fed's move disappointed investors who had expected it to opt for a more aggressive policy. Factory activity in the U.S. mid-Atlantic region contracted for a second month in a row in June, while the U.S. Markit purchasing managers' index showed manufacturing grew in June at its slowest pace in 11 months. "As far as Philly Fed, we've seen a pretty steady diet of lower-than-expected data points, pointing to a continued slowdown," said Paul Nolte, managing director at Dearborn Partners in Chicago. The Dow Jones industrial average was down 12.00 points, or 0.09 percent, at 12,812.39. The Standard & Poor's 500 Index was down 3.99 points, or 0.29 percent, at 1,351.70. The Nasdaq Composite Index was down 14.82 points, or 0.51 percent, at 2,915.63. MSCI's global equity index declined 0.6 percent, with European shares was down 0.1 percent. The Federal Reserve on Wednesday chose to extend its bond-buying programme, dubbed "Operation Twist", rather than implement more quantitative easing as some had hoped. The U.S. central bank made its decision after lowering growth and employment forecasts for the world's largest economy in 2012 and 2013. It said it would consider more stimulus measures if the situation worsened. In Europe, preliminary manufacturing and service sector data across the 17-nation euro area showed the downturn in the region was becoming entrenched as falling new orders and rising unemployment hit business confidence. The survey data also showed that Germany's private sector shrank in June for the second month running, with manufacturing activity hitting a three-year low. A similar survey of private sector activity in China, compiled by HSBC, found its factory sector had shrunk for an eighth straight month in June on weaker demand for exports. Economic growth in the world's most populous nation is widely expected to have slowed for a sixth straight quarter in April through June as the country feels the impact of the euro area debt crisis and property controls weigh on domestic demand. In the oil market, brent crude oil futures were down 82 cents to $91.87 a barrel. The U.S. dollar index, a measure of the greenback's performance against a basket of currencies, rose 0.3 percent to 81.859. Spain's financial problems were also undermining confidence in the financial markets. The nation's borrowing costs hit a new euro era high at a 2.2 billion euro ($2.8 billion) sale of new medium-term bonds, when yields on the five-year debt rose to 6.07 percent, up from 4.96 percent just last month. Link this Share this Digg this Email Reprints

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