Reuters: US Dollar Report: GLOBAL MARKETS-Wall St ends down on Fed uncertainty; data boosts Europe

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GLOBAL MARKETS-Wall St ends down on Fed uncertainty; data boosts Europe Aug 14th 2013, 20:46 Wed Aug 14, 2013 4:46pm EDT * Fed, Macy's weigh on sentiment; Apple shares hit $500 * European shares edge toward 2013 high on stronger data * Oil climbs to four-month high; copper gains on growth optimism By Wanfeng Zhou NEW YORK, Aug 14 (Reuters) - Wall Street stocks fell on Wednesday, pressured by uncertainty about the Federal Reserve's plans to withdraw stimulus, but European shares rose to 2-1/2-month highs after data showed the euro zone emerged from recession in the second quarter. The euro slipped despite the encouraging euro zone economic data as higher U.S. bond yields buoyed the dollar, while sterling jumped after robust U.K. jobs data cast doubt on the Bank of England's pledge to keep interest rates low. European stock markets have outperformed their U.S. counterparts lately as signs grew that the region's economy has finally turned the corner. But they are still lagging U.S. shares, which have hit record highs for the year to date. "There is some talk of global money arriving in Europe as Europe claws its way out of recession," said Rupert Baker, a European equity sales executive at Mirabaud Securities. In the United States, uncertainty about when the Fed will start scaling back its stimulus program has kept stocks under pressure. Recent economic indicators have presented a mixed view of growth and inflation, complicating predictions of the Fed's next policy action. St. Louis Federal Reserve President James Bullard said the central bank needs to gather more evidence that the economy is improving and inflation heading higher before deciding to taper its massive bond-buying program. "The market is confused because the data we're seeing is in both camps - tapering and non-tapering - so investors are holding back on big moves until September," said Robert Francello, head of equity trading for Apex Capital in San Francisco. The Dow Jones industrial average dropped 113.35 points, or 0.73 percent, to end at 15,337.66. The Standard & Poor's 500 Index fell 8.77 points, or 0.52 percent, to close at 1,685.39. The Nasdaq Composite Index dropped 15.17 points, or 0.41 percent, to 3,669.27. Retail stocks were among the day's top decliners on Wall Street after Macy's reported a sales and profit miss in the second quarter and cut its full-year earnings forecast. Macy's stock fell 4.5 percent to $46.33. The S&P's consumer discretionary sector was down 1.1 percent. Apple Inc was one of the biggest gainers of the day, hitting $500 for the first time since January, a day after investor Carl Icahn tweeted that he had built a "large position" in the tech company. The stock closed at $498.50, up 1.8 percent. The FTSEurofirst 300 rose 0.3 percent to close at 1,240.30, within sight of its 2013 peak at 1,258.09. France's CAC-40 index outperformed other major European markets with a 0.5 percent rise that put the index at a two-year high. The FTSEurofirst 300 index is up around 9 percent since the start of 2013, while the U.S. Dow and S&P 500 indexes have both risen nearly 20 percent. The economies of Germany and France grew more quickly than expected in the second quarter. Their growth was faster than a widely heralded expansion in the United States, pulling the euro zone out of a 1-1/2-year recession. MSCI's all-country world index, a measure of 45 equity markets around the world, was down 0.01 percent. The euro traded slightly lower at $1.3255, while the dollar edged down 0.1 percent at 98.08 yen. Sterling hit a high of $1.5548 after data showed a sharp drop in British jobless benefit claims in July and minutes from the Bank of England's last meeting revealed one policymaker had voted against a historic move to tie future interest rates to unemployment. It was last up 0.4 percent at $1.5503. The minutes and stronger labor market data prompted money market traders to price in a greater chance of a hike in the bank's base rate in two years - a year earlier than the BoE has signaled. Yields on benchmark U.S. 10-year Treasuries, which have been supporting the U.S. currency, edged down to around 2.7099 percent, just off Tuesday's near two-year peak of 2.72 percent . Investors have largely positioned for the Fed to start tapering its $85 billion per month of bond purchases soon, but are looking for more data to support that view. Copper prices rose as optimism about the euro zone economy and top metals consumer China boosted confidence about demand for industrial materials. Three-month copper on the London Metal Exchange was last bid at $7,316 a tonne, up from a close of $7,275 on Tuesday, when it also hit its highest in more than nine weeks at $7,354.75. Spot gold rose to $1,335 an ounce from around $1,320. Brent crude prices rose on concerns about supply disruptions in Libya and escalating violence in Egypt. Front-month September Brent, which expires on Thursday, rose 38 cents to settle at $110.20 a barrel after reaching a four-month high of $110.30. The more actively traded October contract gained 34 cents to settle at $108.82. September U.S. oil futures rose 2 cents to settle at $106.85. Link this Share this Digg this Email Reprints

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