Shares, euro down ahead of Bernanke speech
By Herbert Lash
NEW YORK (Reuters) - Stocks fell and the euro retreated on Thursday as investors pared back expectations that Federal Reserve Chairman Ben Bernanke will signal a new round of economic stimulus in a much-anticipated address on Friday to central bankers.
A successful Italian bond sale earlier in the day pointed to growing confidence among investors that the European Central Bank will take measures shortly to tackle more effectively the debt crisis that has plagued the 17-member currency bloc.
But investors grew more doubtful that Bernanke will deliver firmer hints on more monetary easing in his speech in Jackson Hole, Wyoming. The gathering is the same event where he hinted at the Fed's second round of easing in 2010.
Hopes for further easing have grown since minutes of a recent Fed meeting showed policymakers could act "fairly soon".
U.S. shares slid and European stocks hit a four-week low as investors closed out positions ahead of Bernanke's speech, which is expected to provide some clues to the Fed's next move.
"Everyone's waiting on Jackson Hole and QE3," said Mirko Mikelic, portfolio manager at Fifth Third Asset Management in Grand Rapids, Michigan. "Obviously it would be a disappointment if there wasn't QE3, and there would be a sell-off in risk assets."
All 10 S&P stock sectors were lower. The cyclical groups, which closely track the pace of economic growth, declined.
Over the past three weeks the benchmark S&P 500 index has traded in a tight range between 1,400 and the April 2 high of 1,422.38, which has acted as a resistance point to new peaks. Continued...