NEW YORK: The US dollar rose on Wednesday to a six-month high against the euro and bond prices fell on worries over Greece’s fiscal problems amid a renewed bid for safe-havens after a surprise drop in US sales of new home.
The stronger dollar helped knock down the price of gold, oil and industrial metals as investors were cautious ahead of a policy announcement from the US Federal Reserve.
Investors were also awaiting US President Barack Obama’s first State of the Union address at 9 p.m. (0200 GMT Jan. 28), when he is expected to promise more jobs creation and a slimmed budget deficit.
US stocks fell after new home sales dropped unexpectedly in December, while heavy equipment maker Caterpillar Inc. and diversified manufacturer United Technologies Corp. provided guarded outlooks for the months ahead.
European shares fell, with banks the main drag following poor quarterly results from Spanish lender BBVA.
Shortly after midday, the Dow Jones Industrial Average was down 32.34 points, or 0.32 percent, at 10,161.95. The Standard & Poor’s 500 Index was down 3.42 points, or 0.31 percent, at 1,088.75.
The Nasdaq Composite Index was up 0.30 points, or 0.01 percent, at 2,204.03. The FTSEurofirst 300 index of leading European shares closed down 0.9 percent at 1,013.83 points. In early trading, the euro slipped 0.23 percent to $1.404 after hitting a low of $1.4022, the lowest since the end of July, according to Reuters data.
The dollar was up against a basket of major currencies, with the US Dollar Index up 0.20 percent at 78.591. Against the yen, the dollar was down 0.22 percent at 89.42.
Spot gold prices fell $4.90 to $1,092.70 an ounce.
Asian stocks fell for the eighth straight day on Wednesday on fears that China’s heightened efforts to rein in soaring credit growth could hamper the global economic recovery.
The MSCI index of Asia Pacific stocks outside Japan fell 1 percent, while Japan’s Nikkei average fell 0.7 percent to a five-week low.
Oil prices dipped on Wednesday, pressured by US data showing builds in oil product inventories last week, weakness on Wall Street and a stronger dollar.
The higher US gasoline and distillate inventories overshadowed a surprise draw in crude stockpiles, which some analysts attributed to temporary import delays.
US oil for March delivery fell $1.47 to $73.24 a barrel by 1:37 p.m. (1837 GMT), moving below the 200-day moving average of $73.66. Oil prices have fallen from above $83 a barrel on Jan. 11.
In London, ICE Brent crude for March fell $1.38 to $71.91 a barrel.
