NEW YORK: The euro and yen rose against the dollar yesterday as demand eased for the US currency as a safe haven after a better-than-expected reading on US manufacturing data, which helped some US stocks turn higher.
The tech-rich Nasdaq bucked an initial downward trend among US equities on expectations technology will be a beneficiary of government stimulus spending. Companies continue to lower their outlooks because of the worsening economic environment.
Oil fell below $41 a barrel at one point as a deepening US recession curbed demand in the world’s top energy user.
Before 1 p.m., the Dow Jones industrial average was down 21.50 points, or 0.27 percent, at 7,979.36. The Standard & Poor’s 500 Index was up 2.52 points, or 0.31 percent, at 828.40. The Nasdaq Composite Index was up 16.02 points, or 1.09 percent, at 1,492.44.
Both the Dow and S&P 500 briefly fell 10 percent for the year yesterday after the two US benchmarks racked up their worst January ever. Financials were behind the decline, as they were in Europe, where the leading index ended sharply lower.
The FTSEurofirst 300 index of top European shares ended down 2.4 percent at 777.28 points.
Banks continued to be the weakest sector in Europe. British bank Barclays was a top loser, falling 12.3 percent after a Moody’s downgrade.
The euro and yen rose against the dollar, which has rallied in recent months on extreme risk aversion amid the global economic slowdown.
Sterling sank against the dollar, hurt by deepening worries over the health of Britain’s financial sector and economic outlook.
The euro rose 0.74 percent at $1.2874. Against the yen, the dollar fell 0.17 percent at 89.82.
US government bond prices pushed higher as the US economic data reinforced the notion the Federal Reserve will hold rates near zero this year.
The benchmark 10-year US Treasury note rose 20/32 in price to yield 2.78 percent. The 30-year US Treasury bond rose 46/32 in price to yield 3.53 percent.
US light sweet crude oil fell 56 cents to $41.12 a barrel.
Gold slipped as investors took profits after a 15 percent gain in January, but deepening concerns about the economy and turbulence in equity markets are expected to trigger potential gains in bouillon, seen as a store of value. Spot gold prices fell $16.30 to $910.45 an ounce.
Japan’s Nikkei share average fell 1.5 percent, while stocks in Asia-Pacific outside Japan were down 1.85 percent, according to an MSCI index.
