The US dollar rose slightly against the euro and strengthened versus the yen after Fed Chairman Ben Bernanke’s dovish comments sent it tumbling to multi-week lows in the previous session.
“Bernanke yesterday talked about the need for aggressive monetary policy and the dollar took a pretty good whack, so it’s probably clawing some of that back,” said Art Hogan, managing director of Lazard Capital Markets in New York.
Bernanke said Monday that accommodative monetary policy would stay in place to support demand and, over time, drive down long-term unemployment. He stopped short of signalling the start of a new round of asset purchases by the Fed.
US stocks were little changed after a more than 1 percent rally lifted the S&P 500 to a four-year high on Monday, while a number of large-cap stocks hit new highs as portfolio managers grabbed top performers as the end of the quarter approached.
The S&P 500 is on track to close its best quarter since 2009 and its fourth straight month of gains. MSCI’s main global stock index was up 0.3 percent after hitting its highest level since Aug. 1.
Hogan said the Fed was only part of the equation behind stronger global equities. “We still believe there’s a soft landing in China, Europe has stabilized and the US continues to chug along at a sustainable rate,” he said.
In afternoon trading, the Dow Jones industrial average added less than 1 point to 13,242.09. The S&P 500 Index gained 0.90 point, or 0.06 percent, to 1,417.41. The Nasdaq Composite rose 9.86 points, or 0.32 percent, to 3,132.43.
The pan-European FTSEurofirst 300 closed 0.5 percent lower. France’s Total fell 6 percent after it said a massive gas leak in a North Sea platform may take six months to halt.
US dollar-denominated Nikkei futures jumped 1.2 percent, boosted further by the weakening yen.
A private sector report showed US consumer confidence dipped in March but was nearly in line with forecasts, while inflation expectations rose to the highest in 10 months.
US Treasuries prices added slight gains after the data, with the 10-year yield again below its 200-day average and at its lowest in two weeks.
The benchmark 10-year US Treasury note was up 18/32, the yield at 2.1889 percent.
Lower yields contributed to record-setting dollar amounts of UScorporate note and bond sales this quarter.
With four days left in the quarter, data from Thomson Reuters unit IFR show $274.5 billion were priced in investment grade deals, eclipsing the previous record for a first quarter of $272.3 billion in 2007, before the credit crisis.
This is the best quarter ever for high-yield deals. At $88 billion, the amount beats the previous record of $85.3 billion set in the last quarter of 2010.
Crude futures prices zigzagged near break-even, with US crude up 0.28 to settle at $107.33 per barrel and Brent down 0.09 percent at $$125.54.
Gold was also little changed near two-week highs.
