* World stocks index hits record peak, Europe closes lower
* U.S. dollar bounce loses steam on profit taking
* Wall Street pulls back as banks lag
(Adds close of European markets)
By Chuck Mikolajczak
NEW YORK, Feb 16 A gauge of major world equity
markets touched a record high for a second straight day on
Thursday, lifted by a round of global data, while a drop in the
dollar helped boost U.S. bond prices.
MSCI's All-Country World index hit an
intraday record of 444.94, although stocks on Wall Street dipped
as the financial sector, down 0.6 percent, lost ground
for the first time in six sessions.
In the United States, manufacturing activity in the
Mid-Atlantic region surged to its highest in 33 years, housing
data indicated a recovery in the sector was on track, and weekly
jobless claims pointed to a labor market that continues to
Other data showed improvements in exports from Indonesia and
Taiwan, and falling unemployment in Sweden and the Netherlands.
Still, U.S. equity indexes pulled back after touching
another record high, with the benchmark S&P 500 modestly lower
after notching its longest winning streak in nearly four years.
"You have got to think the market is tired and needs a
little rest here, it's not that stocks are for sale," said
Stephen Massocca, Chief Investment Officer, Wedbush Equity
Management LLC in San Francisco.
The Dow Jones Industrial Average fell 17.67 points,
or 0.09 percent, to 20,594.19, the S&P 500 lost 5.23
points, or 0.22 percent, to 2,344.02 and the Nasdaq Composite
dropped 12.74 points, or 0.22 percent, to 5,806.70.
MSCI's benchmark global equity index edged up 0.08 percent
to 444.01. Europe's index of leading 300 stocks closed
0.4 percent lower.
The dollar weakened 0.7 percent against a basket of major
currencies, retreating further from a one-month high on
uncertainty about the timing of the next U.S. interest rate hike
from the Federal Reserve.
Expectations for a Fed rate hike in March rose as high as 31
percent after hawkish comments from Fed Chair Janet Yellen on
Tuesday, but fed funds futures now imply traders see a 22
percent chance of a hike next month.
The fall in the dollar helped bond prices rally, along with
the upbeat economic data. Benchmark 10-year U.S. Treasury notes
were last up 17/32 in price to yield 2.4431 percent,
down from 2.50 percent late on Wednesday.
"The 10-year can't get through two-and-a-half (percent). It
gets bought like crazy every time it gets close to
two-and-a-half percent," said Massocca.
Oil prices retreated from earlier highs despite the
weakening of the greenback but held in a tight range as the
market weighed swelling U.S. inventories against possible
renewed efforts by major oil producers to reduce a price-sapping
Brent was last off 0.2 percent at $55.64 after
climbing as high as $56.24 a barrel, while U.S. crude was
last up 0.4 percent at $53.34 after touching a session high of
Gold, up 0.7 percent to $1,240.90 an ounce, was the
beneficiary of the weaker greenback along with political
uncertainty over U.S. President Trump's policies and upcoming
elections in several European Union countries.
Copper lost 1.2 percent to $5,992 a tonne after news
China's overseas investment had weakened and sentiment waned
over demand in the world's top copper user.
(Additional reporting by Richard Leong and Karen Brettell;
Editing by Bernadette Baum and James Dalgleish)