Sun, Mar 28, 2004 page10

• Gold, oil soften NYSE bond prices slide

  INTERNATIONAL JITTERS With the dollar sliding and the S&P 500 falling for the third straight week, investors rediscover the safe haven of gold amid global violence

  • REUTERS
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  Gold and oil wound up as the big winners in US markets on Friday, while shares dipped and bond prices slid.

  The dollar fell slightly against the euro and the yen.

  For the week, both the blue-chip Dow average and the tech-heavy Nasdaq rose, while the broader Standard & Poor's 500 index fell for the third straight week. The Dow gained 0.26 percent and the Nasdaq climbed 1.01 percent -- breaking two weeks of losses. The S&P500 was off 0.15 percent.

  Stocks spent most of the day in positive territory, buoyed in part by the University of Michigan's report showing consumer confidence rose in March to 95.8 from 94.4 in February.

  But in the last hour before the close, investors sold equities to take some profits from Thursday's rally. Intel Corp, the world's biggest computer-chip maker, pulled both the Dow and the Nasdaq lower, falling 41 cents or 1.48 percent to US$27.38.

  "It certainly looked like people wanted to reduce some of their exposure after the last few days, particularly with the strong rally yesterday and the nice rally through most of today," said Jack Caffrey at JP Morgan Private Bank.

  At Friday's close, the Dow Jones industrial average was down 5.85 points, or 0.06 percent, at 10, 212.97. The Nasdaq Composite Index fell 7.15 points, or 0.36 percent, to close Friday at 1,960.02, a day after scoring its biggest daily percentage gain in nine months. The Standard & Poor's 500 Index dipped 1.13 points, or 0.10 percent, to finish at 1,108.06.

  At the COMEX in New York, gold rose to the highest level in 2-and-a-half months as nervous investors rediscovered global violence and strife in the Middle East.

  "Gold divorced from the euro, clearly," said Robert Gottlieb at HSBC. "Geopolitical issues are paramount."

  April gold closed up US$5.30 at US$422.20 an ounce.

  NYMEX May crude oil rose 22 cents to US$35.73 a barrel. April gasoline closed 2.41 cents higher at US$1.1290 a gallon. April heating oil rose 0.31 cent, ending at 89.21 cents.

  The Reuters-Commodity Research Bureau index of 17 futures contracts closed 0.15 point lower at 278.86, after hitting a 23-year high of 285.28 on Monday.

  US Treasury bond prices dropped as the uptick in consumer confidence helped create a selling opportunity for traders worried about next week's jobs report.

  By late afternoon, the benchmark 10-year note was off almost a full point in price -- falling 25/32 to 101-11/32 -- for a yield of 3.84 percent, up from 3.74 late Thursday. It was the biggest one-day yield jump in two months.

  The 30-year bond lost 1-4/32 to 109-7/32, while its yield shot up to 4.76 percent from 4.70 percent, while the yield on the two-year note edged up to 1.58 percent from 1.51 percent at Thursday's close. The two-year note's price dipped 5/32 to 99-27/32.

  At the end of the day, the dollar lost steam against both the euro and the yen.

  The euro was at US$1.2135, up 0.05 percent late Friday in New York.

  The dollar hit a five-week low of 105.56 yen after data showed spending by Japanese households rose for the fourth straight month in February.

  Late Friday, the dollar was at 105.98 yen, down from 106.13 yen late Thursday. The euro also slipped against the yen, dipping to 128.60 from 128.82 late Thursday.

  Earlier in the session, the dollar had eked out a gain against the euro, helped by growing expectations of an interest-rate cut in Europe.

  But by late in the day, the euro got a lift when traders were forced to buy euros to cover their short positions after the German Ifo business climate data -- though disappointing -- turned out to be not nearly as bad as the "whisper numbers" had indicated.

  In overseas trading, the FTSE Eurotop 300 index ended up 0.2 percent at 973.59. For the week, it was down 0.36 percent and off 5.3 percent from its 2004 peak on March 3.

  In Japan, the Nikkei average jumped 2.08 percent to 11,770.65, the highest close since June 3, 2002. For the week, the Nikkei was up 3.08 percent. It appears to be aiming for 12,000.

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