New York - Strong US economic data boosted the
dollar and supported stocks on Thursday, outweighing worries about a possible
downgrade of global banks by Moody’s and persistent fears of a chaotic Greek
default.
The dollar hit its highest level against the yen since late October
after a report showed claims for unemployment benefits in the United States
unexpectedly fell near a four-year low last week.
The greenback also hit a three-week high against the euro as
growing acrimony between Athens and euro-zone creditors increased fears that
Greece mail fail to secure enough funds to avert a messy debt default.
Key Wall Street indexes rose on the jobless claims data and a
stronger-than-expected increase in US housing starts for January.
“The jobless data is another brick in the wall, another example of
the fact that slowly but surely - slower than we’d like - our economy is
bouncing back,” said Mike Shea, a managing partner and trader at Direct Access
Partners LLC in New York.
“Still, global macro issues are always going to trump what’s going
on in the U.S., at least this global issue (Europe).”
The Dow Jones industrial average gained 55.70 points, or 0.44
percent, to 12,836.65, while the Standard & Poor’s 500 Index was up 3.35
points, or 0.25 percent, at 1,346.58. The Nasdaq Composite Index was up 9.67
points, or 0.33 percent, at 2,925.50.
Shares of Morgan Stanley were down 1 percent to $18.75 after
Moody’s said it may cut the credit ratings of 17 global banks 114 European
financial institutions as the euro zone debt crisis continues to pound capital
markets.
In Europe, the FTSEurofirst 300 index of top shares trimmed losses
after the U.S. data but remained 0.18 percent lower. World stocks as measured by
the benchmark MSCI All-Country World Index declined 0.3 percent.
Failure by euro-zone finance ministers to agree on a new bailout
package for Greece kept European markets on edge, sending the euro as low as
$1.29744 on trading platform EBS, its weakest since Jan. 25. It last traded at
$1.303, 0.26 percent lower against the greenback.
“To the extent that the situation in Europe remains, at least in
recent days, more the overriding focus, I’m not sure this (U.S.) data is going
to be enough to really change that current dynamic,” said Robert Lynch, head of
currency strategy for the Americas at HSBC in New York.
Against the Japanese yen, the dollar was up 0.65 percent at 78.84
after trading as high as 78.94 yen, its strongest since Oct. 31.
As investors moved into stocks, prices of benchmark 10-year U.S.
Treasury notes fell 7/32, sending their yield up to 1.955 percent.