Global stocks, euro ease on debt talk caution

Thursday, 15 September 2011 00:00 - - {{hitsCtrl.values.hits}}

NEW YORK Reuters:- Global equities and the euro erased gains on Wednesday as optimism over favorable comments for the creation of euro zone bonds faded and lackluster data on U.S. retail sales gave investors pause.

Wall Street opened higher, tracking gains in European equity markets, as investors welcomed signs of growing cooperation in Europe to tackle the region’s debt crisis.

But investors soon realized comments by the president of the European Union’s executive body that it was presenting options for euro area bonds may not be enough to snuff the crisis.

Separate data showed U.S. business inventories rose slightly less than expected in July, suggesting firms remained cautious about future demand at the start of the third quarter.

“Huge market turmoil had an obvious impact on retail sales at the same time job hires remain lackluster,” said Peter Boockvar, equity strategist at Miller Tabak + Co in New York.

Growth in U.S. retail sales stalled in August after a pitched battle over spending in Congress undermined faith Washington could steer the country clear of a double-dip recession, data showed.

Wall Street turned lower. The Dow Jones industrial average <.DJI> was down 94.57 points, or 0.85 percent, at 11,011.28. The Standard & Poor’s 500 Index <.SPX> was down 8.15 points, or 0.69 percent, at 1,164.72. The Nasdaq Composite Index <.IXIC> was down 7.80 points, or 0.31 percent, at 2,524.35.

MSCI’s all-country world equity index retreating, shedding 0.4 percent. But Europe remained in positive territory. The FTSEurofirst 300 <.FTEU3> index of top European shares rose 0.7 percent.

The euro erased all of its gains versus the dollar to trade lower as investors turned cautious ahead of a conference call between the leaders of Greece, France and Germany.

The euro traded slightly lower, down less than 0.1 percent, at $1.3673.

The conference call is set to start at about 1700 GMT, one hour later than originally announced, a Greek government official said.

“There’s a fair degree of uncertainty ahead of those debt talks,” said Joe Manimbo, senior market analyst at Travelex Global Business Payments in Washington.

Prices for most U.S. Treasury securities edged higher, erasing earlier losses, although the 30-year bond remained in the red ahead of a 1 p.m. auction.

The benchmark 10-year Treasury note was trading little changed in price to yield 2 percent. The 30-year bond was off 9/32 in price to yield 3.34 percent.

Brent crude futures were up 12 cents at $112.02 per barrel. U.S. crude was down 99 cents at $89.22.

Spot gold prices fell $17.21 to $1,816.00 an ounce.