NEW YORK (Reuters) - Global shared retreated and the U.S. dollar weakened on Thursday after expectations for further stimulus from the Federal Reserve were dampened and data from Europe and China pointed to a slowing global economy.
The dollar pared some of its losses against the euro after the president of the St. Louis Federal Reserve said data since the last policy-makers’ meeting was somewhat better and that minutes from that meeting were “a bit stale”.
The U.S. dollar index .DXY down 0.02 percent at 81.472, while the euro rallied to a fresh seven-week high against the dollar, up 0.3 percent at $1.2564.
Minutes from the July 31-August 1 meeting hinted that another round of monetary easing would occur “fairly soon,” but James Bullard of the St. Louis Fed told CNBC television that the economic outlook has since brightened.
Stocks on Wall Street opened lower and European shares extended losses as the outlook for the global economy sapped investor sentiment.
The Dow Jones industrial average .DJI was down 96.48 points, or 0.73 percent, at 13,076.28. The Standard & Poor’s 500 Index .SPX was down 9.20 points, or 0.65 percent, at 1,404.29. The Nasdaq Composite Index .IXIC was down 24.51 points, or 0.80 percent, at 3,049.16.
In Europe, the FTSEurofirst 300 .FTEU3 of top regional shares was down 0.8 percent at 1,086.84.
The Purchasing Managers’ Index survey from Markit suggested that the euro zone was destined to return to recession, as the poll notched up a seventh month of contraction.
Chinese manufacturing PMI data hit their lowest levels since November as new export orders slumped and the stock of unsold goods rose.
In the United States, data showed the number of Americans filing new claims for jobless benefits unexpectedly rose last week while U.S. manufacturing improved only slightly in August, worrisome signs for an economy struggling to create enough jobs.
“Jobless claims continue to indicate ... a sluggish labor market,” said Peter Cardillo, an economist at Rockwell Global Capital in New York. “The numbers also strengthen the hand of the Fed to aid the economy with more stimulus.”
However, Cardillo and other economists said the slow pace of healing in the labor market doesn’t necessarily point to immediate action by the Fed.
Brent crude futures were up 94 cents to $115.85 a barrel.
U.S. light sweet crude oil rose 17 cents to $97.43 a barrel.
Reporting By Herbert Lash; Editing by Chizu Nomiyama