* MSCI world share index dips 0.3 pct, European shares flat
* Financial shares rally after strong results from Goldman
* Euro recovers as ECB policymaker reassures markets
* German 10-year bond auction draws strong demand
By Ryan Vlastelica
NEW YORK, Jan 16 World stock markets ended flat
on Wednesday as strong financial results lifted banking shares,
though weak data from Europe raised concerns about the global
Prices of safe-haven German bonds and U.S. Treasuries rose
after the World Bank sharply cut its outlook for world growth
this year to 2.4 percent from 3 percent, citing a slow recovery
in developed nations.
Goldman Sachs' shares were among the top gainers in
the United States, jumping 4.1 percent to $141.09 after it
reported fourth-quarter earnings that nearly tripled, while
revenue surged on dealmaking.
JPMorgan Chase & Co also reported sharp increases in
earnings, and its stock rose 1 percent to $46.82.
"Both (Goldman and JPMorgan Chase) had terrific results, and
so far it looks like banks are justifying the run-up they've had
over the past few months," said Wayne Kaufman, chief market
analyst at John Thomas Financial in New York. "But for the
economy as a whole, we're only seeing slow improvement that is
not nearly as fast as we'd like to see."
The Dow Jones industrial average ended down 23.66
points, or 0.17 percent, at 13,511.23. The Standard & Poor's 500
Index was up 0.29 point, or 0.02 percent, at 1,472.63.
The Nasdaq Composite Index gained 6.77 points, or 0.22
percent, at 3,117.54.
The MSCI world equity index fell 0.3 percent
while Europe's FTSE Eurofirst 300 index closed flat
following a series of losses. Japan's benchmark Nikkei stock
average shed 2.6 percent for its largest daily fall in
Along with the weak World Bank outlook, industry figures
showed European new car sales plunged in 2012 to their lowest
since 1995, with all major euro zone markets suffering, whereas
Britain and Sweden recorded growth. This came a day after
Germany reported its economy shrank at the fastest pace in
almost three years in the final quarter of 2012.
"Following the German growth numbers yesterday there is
simply a realization the recession in the euro zone in the
fourth quarter will be much bigger than the previous consensus,"
said Daiwa Securities economist Tobias Blattner.
However, the euro recovered some of its losses against the
dollar after a European Central Bank policymaker eased fears
that officials might undermine the currency's recent strength.
The euro was trading just below $1.33, at around $1.3287
, having made up some of the ground lost when the outgoing
head of the Eurogroup, Jean-Claude Juncker, said the currency
was "dangerously high."
The turnaround came when ECB policymaker Ewald Nowotny said
the exchange rate was "not a matter of major concern,"
reassuring investors that the central bank would not target a
weaker exchange rate to help the region's struggling economies.
U.S. consumer prices were flat in December, pointing to
muted inflation pressures that should help give the Federal
Reserve room to prop up the economy by staying on its ultra-easy
monetary policy path. Equity markets were unmoved by the data.
In bond markets, Germany drew healthy demand for its debt at
an auction of new 10-year bonds.
"Uncertainties about the economic outlook and political
risks continue to loom and today's auction results are a sign
that market dealers still see some value in core (European)
debt," said Annalisa Piazza, market economist at Newedge.
Ten-year German bonds in the secondary market rose to put
yields at 1.49 percent.
U.S. Treasury prices, meanwhile, extended their recent gains
on concerns about the federal government's debt limit. The
benchmark 10-year U.S. Treasury note was up 5/32 in
price, with the yield at 1.8167 percent.
Assets traditionally viewed as offering protection against
risk have been boosted this week as political wrangling has
begun again over raising the U.S. government's self-imposed debt
limit, which is expected to be reached before March.
Gold advanced for a third straight session, climbing to
$1,679.54 an ounce for a third straight session of gains,
supported by expectations that the world's leading central banks
will continue their ultra-loose monetary policies.
Worries over supply pushed platinum prices up to
$1,684 to mark a seventh straight session of gains, the longest
upward streak since early October.
Workers for top producer Anglo American Platinum downed
tools on Wednesday in protest at an announcement from the firm,
known as Amplats, that it would close mines and cut jobs.
Cold weather in Europe and the United States underpinned oil
prices but the rising fears over the global growth outlook meant
any gains were limited.
The Organization of the Petroleum Exporting Countries, in a
monthly report, also said demand for its crude would be lower
than expected in 2013 because of higher supply from rival
Brent futures rose 0.3 percent to $110.60 per barrel
while U.S. February crude futures rose 0.9 percent to
$94.14 on an unexpected drop in U.S. crude oil stockpiles.