NEW YORK: The dollar rose to a 6-1/2-month high against the euro on Friday and US stocks fell as concerns about the fiscal health of some smaller euro zone countries curbed investors’ appetite for risk.
News that the US economy grew at the fastest pace in more than six years in the fourth quarter also lifted the dollar, boosting views the United States was recovering faster than other developed countries.
The batch of reassuring US economic data and improving consumer sentiment initially lifted US stocks and crude oil prices. But rising US fuel stockpiles and expectations that members of the Organization of Petroleum Exporting Countries will boost exports helped pushed oil down toward $73 a barrel.
US stocks indexes rose more than 1 percent in morning trade as the figures on gross domestic product and other data drove optimism about the economy, but worries about Europe drove the broader market to lose ground by midday.
Before 1 p.m., the Dow Jones Industrial Average was up 21.84 points, or 0.22 percent, at 10,142.30. The Standard & Poor’s 500 Index was down 0.18 points, or 0.02 percent, at 1,084.35. The Nasdaq Composite Index was down 7.08 points, or 0.32 percent, at 2,171.92.
Investors sold off shares of such technology bellwethers as Apple Inc., Microsoft Corp. and International Business Machines Corp. European shares notched their biggest one-day gain in three weeks, with banks recovering some ground lost on worries about Greece’s deficit and on optimism over the US economic data.
The FTSEurofirst 300 index of top European shares rose 1 percent to close at 1,011.89 points, its biggest one-day gain since Jan 4. But the index fell 3.3 percent in January, its worst monthly performance since February 2009. The euro fell as low as $1.3863, according to Reuters data, the lowest since mid-July.
The dollar was up against a basket of major currencies, with the US Dollar Index up 0.66 percent at 79.422. Against the yen, the dollar was up 0.61 percent at 90.43.
US Treasuries pared earlier losses and rose as the rally in the US stock market lost steam.
Benchmark 10-year Treasury notes were up 4/32 in price to yield 3.63 percent.
Asia Pacific stocks outside Japan as measured by MSCI fell 2 percent to a two-month low, while Japan’s Nikkei average fell 2 percent to a six-week closing low.
Oil prices fell toward $73 per barrel on Friday, heading for a third consecutive week of losses. US oil for March delivery fell 34 cents to $73.30 a barrel by 1:48 p.m. EST (1848 GMT), down more than 10 percent from a 15-month high of just under $84 on Jan. 11. In London, ICE Brent crude for March fell 28 cents to $71.85 a barrel. Oil prices have been pressured this week by a stronger dollar.