Equities gain, euro slumps as ECB eyes faster bond buys

Tue May 19, 2015 5:07pm EDT
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By Michael Connor

NEW YORK (Reuters) - U.S. and European equities rose to trade near record highs on Tuesday, and the euro tumbled on signals the European Central Bank may accelerate its 1 trillion euro bond-buying program over the next two months.

The dollar gained 1.5 percent against the euro and was broadly ahead for a second day, while U.S. Treasuries prices fell after data showed that U.S. housing starts in April rose to the highest in nearly 7-1/2 years.

Oil prices slumped more than 3 percent, partly because of the dollar rally.

Wall Street's Dow Industrials index closed at an all-time high, though other major U.S. stock indexes mostly eased in choppy trading, unsettled by disappointing Wal-Mart results and fears the housing data might encourage Federal Reserve policymakers to move sooner on interest-rate hikes.

"There really is a lot of fear about the threat of higher interest rates," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma. "It's not an 'if' story. It's a 'when' story."

Wal-Mart's (WMT.N: Quote) shares ended down 4.4 percent at $76.43. The retailer was the biggest drag on the Dow and the S&P 500 after reporting slower-than-expected U.S. same-store sales growth.

The Dow Jones industrial average .DJI rose 13.51 points, or 0.07 percent, to end at a record 18,312.39.

The S&P hit a record intraday high of 2,133.02 before ending down 1.37 points, or 0.06 percent, at 2,127.83. The Nasdaq Composite .IXIC dropped 8.41 points, or 0.17 percent, to 5,070.03.   Continued...

An employee shows fifty-euro notes in a bank in Sarajevo in this March 19, 2012 file photo. REUTERS/Dado Ruvic