Reuters: US Dollar Report: GLOBAL MARKETS-Shares, oil fall on fears of US 'fiscal cliff'

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GLOBAL MARKETS-Shares, oil fall on fears of US 'fiscal cliff' Dec 13th 2012, 20:50 Thu Dec 13, 2012 3:50pm EST * World shares turn lower on news of impasse over budget talks * Government debt falls on unemployment data * Dollar holds steady against euro currency * Oil falls on fears of rising inventories, fiscal cliff talks By Herbert Lash NEW YORK, Dec 13 (Reuters) - A seven-day rally in world shares came to a halt and commodity prices slipped on Thursday after negotiations over the U.S. "fiscal cliff" hit a wall, with both Republicans and the White House voicing frustration at the lack of progress. Wall Street turned lower after U.S. House of Representatives Speaker John Boehner, the top congressional Republican, refused to give ground in negotiations with President Barack Obama on a new fiscal plan. Boehner voiced frustration about talks with the White House to avert the steep tax hikes and spending cuts that will be triggered at the end of the year unless Congress intervenes. "Today's there's a certain sense that both sides are still apart," said Gordon Charlop, managing director at Rosenblatt Securities in New York, describing trading as "tweaking" while investors watch Washington's back-and-forth drama. "It's imperative they cooperate on some levels, and if they do, I think we'll see a Santa Claus rally," Charlop said. Data showing U.S. retail sales rose in November and jobless claims fell sharply last week were hopeful signs for an economy that appears to have slowed sharply this quarter. But the news failed to buoy investors consumed by the budget talks. The Dow Jones industrial average was down 56.87 points, or 0.43 percent, at 13,188.58. The Standard & Poor's 500 Index was down 7.70 points, or 0.54 percent, at 1,420.78. The Nasdaq Composite Index was down 20.31 points, or 0.67 percent, at 2,993.50. MSCI's all-country world equity index, which had chalked up seven straight days of gains, fell 0.29 percent to 336.81. European shares slipped from 18-month highs, led by a fall in heavyweight healthcare stocks, after uncertainty over the U.S. budget talks prompted investors to cash in an eight-session winning streak. The FTSEurofirst 300 index closed down 0.42 percent at 1,134.86, ending a three-week rally that had pushed prices to 18-month highs. Crude oil prices slipped under $109 a barrel due to rising U.S. oil stockpiles and fears that the world's largest economy might risk a recession if a resolution to the budget issue is not reached. With the front-month January contract approaching expiration on Friday, Brent crude's losses were deeper than for its U.S. counterpart. Benchmark Brent crude settled down $1.59 to $107.91 a barrel. U.S. crude fell 88 cents to settle at $85.89. The Thomson Reuters-Jefferies CRB Index, which tracks 19 commodity markets, was down 0.85 percent at 292.6968. The dollar held steady against the euro after falling for three straight days as the looming fiscal crisis curbed weakness in the currency after the Federal Reserve on Wednesday announced further monetary stimulus. The Fed met market expectations by saying it would keep buying $45 billion of government bonds each month after its "Operation Twist" program expires. That is in addition to its purchases of $40 billion a month in agency mortgage-backed securities. The euro was 0.03 percent higher at 1.3077, having hit a session low of $1.3039 and a session high of $1.3100. U.S. Treasury debt prices eased after data showed claims for unemployment benefits were lower than expected in the latest week, which undermined the safe-haven appeal of lower-risk U.S. government debt. The benchmark 10-year U.S. Treasury note was down 9/32 in price to yield 1.7317 percent. Link this Share this Digg this Email Reprints

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