Recovery in euro helps U.S. stocks swing back

07:28, May 18, 2010      

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The euro rebounded back higher against the dollar after dipping to four-year lows on Monday, sending the U.S. stocks on a V-shape swing to higher closing.

As of market closing, the Dow Jones industrial average rose 5. 67, or 0.05 percent, to 10,625.83. The Standard & Poor's 500 index added 1.26, or 0.11 percent, to 1,136.94 and the Nasdaq gained 7. 38, or 0.31 percent, to 2,354.23.

The euro pared early losses and gained against the greenback in late afternoon trading. A rally in technology shares also helped to lift the big board.

Stocks tumbled more than 1.5 percent earlier as the euro slipped to four-year lows amid worries about the European economy. Investors worried that the unprecedented European rescue package would not be enough to defuse the continent's crisis over high levels of government debt.

The market struggled for much of the day as steep slides in commodity prices hit energy and materials, while a weak Empire State manufacturing report put a damper on investor sentiment.

Light, sweet crude for June delivery lost 1.53 dollars to settle at 70.08 dollars a barrel on the New York Mercantile Exchange. Crude futures dropped to as low as 69.27 dollars a barrel during trading, the first time below the 70-dollar level in five months.

Shares of oil giants such as ExxonMobil, Chevron and ConocoPhillips fell.

Also adding pressure to market sentiment, the Federal Reserve Bank of New York's Empire Manufacturing survey showed business conditions improved for manufacturers in the area for the tenth consecutive month in May, but at a slower pace than economists had expected.

The New York Fed reported its gauge of regional manufacturing activity fell to 19.11 in May from 31.86 in April. The level still indicates growth but was much weaker than the expected level of 30.

The NY Fed report, along with the Philly Fed report, due out on Thursday, was watched closely as a precursor to the national report on manufacturing from the Institute for Supply Management. Meanwhile, U.S. home-builder sentiment hit a 2.5-year high in May, boosted by the homebuyer tax credits and strengthening economy, according to the National Association of Home Builders.

Monday's move came after a two-day slump in Wall Street, as investors worried more budget-cutting measures may cause an economic slowdown in Europe. Despite that, both the Dow and S&P gained more than 2 percent last week, while the technology-heavy Nasdaq rose more than 3.5 percent.

Source: Xinhua

(Editor:黄硕)

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