Dollar, stocks rebound on strong U.S. data

Thu Dec 11, 2014 4:47pm EST
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By Herbert Lash

NEW YORK (Reuters) - The dollar and most global equity markets on Thursday snapped three days of losses after strong U.S. retail sales and declining jobless claims signaled the U.S. economy could weather weak oil prices and a likely interest rate hike next year.

U.S. crude futures fell below $60 a barrel for the first time in five years, breaching a key psychological support level, as oil extended this week's losses on oversupply concerns.

Stocks and the dollar gained after data showed U.S. consumer spending advanced at a brisk clip in November as lower gasoline prices gave holiday shopping a boost and offered the latest sign the American economy is still gathering momentum.

"We are starting to get some metrics around the energy and we are seeing that one 'X' factor of, 'Will consumers spend this extra money?'" said Sean McCarthy, regional chief investment officer for Wells Fargo Private Bank in Scottsdale, Arizona. "And in the holiday season, they are (spending), and more so."

The dollar rose 0.96 percent to 118.94 yen JPY=, reversing a three-day drop that started after the greenback rose to a seven-year peak against the Japanese currency on Monday.

The euro EUR= fell 0.4 percent to $1.2392.

The S&P 500 .SPX equities index had shed 2.4 percent over the past three sessions, the benchmark's worst run in two months, as tumbling oil prices weighed on the energy .SPNY sector.

But crude's weakness helped holiday spending, and retail sales data for November beat expectations. The S&P retail index .SPXRT rose 1.01 percent, lifted by a 1.34 percent gain by Home Depot (HD.N: Quote) to $100.27.   Continued...

A sheet of the front side of United States one dollar bills is seen during production at the Bureau of Engraving and Printing in Washington November 14, 2014.   REUTERS/Gary Cameron