NEW YORK: The price of shorter-term US government securities fell yesterday, on fears that the Federal Reserve could hike interest rates in 2010, a view that also helped the US dollar extend gains.
Oil see-sawed around $68 a barrel yesterday on the stronger dollar and weakness in US and European equity markets.
New York’s main futures contract, light sweet crude for delivery in July, dipped six cents to $68.38 a barrel. In late morning London trade yesterday, Brent North Sea crude for July delivery dropped 19 cents to $68.15.
The euro fell broadly after ratings agency Standard & Poor’s cut Ireland’s sovereign credit rating to AA, the country’s second downgrade by an agency in three months. The downgrade provided a fresh catalyst to sell the euro, which fell to a nearly two-week low of $1.3806 and bolstered the dollar.
US stocks slid after fast-food chain McDonald’s Corp. warned second-quarter results may take a hit from currency swings.
Shortly after 1 p.m., the Dow Jones Industrial Average was down 105.65 points, or 1.21 percent, at 8,657.48. The Standard & Poor’s 500 Index was down 10.77 points, or 1.15 percent, at 929.32. The Nasdaq Composite Index was down 25.26 points, or 1.37 percent, at 1,824.16.
The pan-European FTSEurofirst 300 index fell 0.8 percent to close at 865.11 points.
The dollar was up against a basket of major currencies, with the US Dollar Index up 0.25 percent at 80.866 from a previous session close of 80.668.