December 7, 2013
Dollar gains, shares flat on expected delay to Fed tapering
The dollar gained and global equity markets traded at five-year highs lifted by a healthy outlook for stocks as markets awaited a backlog of US economic data that could yield clues on when the Federal Reserve begins to pare its stimulus program.
Wall Street closed near break-even as investors weighed expectations that the Fed will likely keep its bond-buying program in place well into 2014, which would be good for stocks, against a less-than-stellar outlook for corporate earnings.
The United States is enjoying moderate growth with tame inflation, a type of Goldilocks economy that is neither too hot nor too cold but has been distorted by the Fed's intervention.
MSCI's world equity index, which tracks shares in 45 countries, was up as much as 0.7 percent before flattening, while the FTSEurofirst 300 index of leading European shares rose 0.14 percent to 1,279.43.
Solid corporate earnings from the likes of Philips (PHG.AS), whose shares jumped 6.5 percent after it reported a near tripling of its third-quarter net profit, lifted European shares.
The Dow Jones industrial average was down 27.91 points, or 0.18 percent, at 15,371.74. The Standard & Poor's 500 Index was down 3.12 points, or 0.18 percent, at 1,741.38. The Nasdaq Composite Index was down 2.02 points, or 0.05 percent, at 3,912.26.
The dollar climbed against the yen and the Swiss franc as a few investors positioned for an expected strong US jobs data reading on Tuesday, which will provide new fodder for the debate over when the Fed will begin to scale back monetary stimulus.
The dollar rose 0.44 percent against the yen to 98.13 yen, inching toward a near three-week high of 99.00 yen set last Thursday. The dollar was 0.04 percent higher against the Swiss franc at 0.9021 francs with the dollar index was up 0.06 percent at 79.700.