* U.S. stocks fall, European stocks extend losses
* Weak earnings, Deutsche loss, German retail sales weigh
* Euro climbs for a third straight day
NEW YORK, Jan 31 The euro gained on Thursday for
the third straight session against the dollar on the way to its
best monthly performance in more than a year, while U.S. stocks
fell as investors awaited a key U.S. jobs report slated for
U.S. data continued to paint a mixed picture of the world's
largest economy. A measure of business activity in the U.S.
Midwest rose in January to its strongest since April, but an
earlier report indicated a rise in U.S. jobless claims in the
A drop in German retail sales initially pressured the euro,
but the currency's recent bullish trend resumed during U.S.
trading. The single currency was headed for its best month in 15
months against the dollar, as signs of recovery in the euro
zone's economy and its banks helped the euro.
The euro hit a peak of $1.3593 on Thursday before
paring gains. The Federal Reserve's promise of continued support
was widely expected to keep downward pressure on the dollar. The
euro zone common currency was last at $1.3570 and up 2.9 percent
this month against the dollar, its best month since October
The dollar, meanwhile, touched a fresh 2-1/2 year high
against the yen.
"The overall recent trends are intact," said Nick
Bennenbroek, head of currency strategy, at Wells Fargo Bank in
New York. "The euro probably wants to go higher and the yen
probably wants to go lower."
Recent gains in risky assets such as equities, commodities,
and high-yield debt have eased after sharp advances in the last
six months. Growth in emerging economies such as China has
picked up and fears of a collapse of the euro have been calmed
by the European Central Bank.
Data on Wednesday showed U.S. GDP slipped 0.1 percent where
a rise had been expected, although the Federal Reserve indicated
the pullback was likely to be brief and repeated its promise to
continue supporting the economy.
But the main focus is on U.S. payrolls data on Friday for a
take on the health of the world's biggest economy. Employers are
forecast to have added 160,000 jobs in January after a rise of
155,000 in December.
"Unfortunately it's still a mixed picture. It appears we are
just getting a lot of conflicting data right now," said Jack
Ablin, chief investment officer at BMO Private Bank in Chicago.
"With 1,500 (in the S&P stock index) right here, my guess is
there is just not enough conviction to push us substantially
The Dow Jones industrial average was down 49.84
points, or 0.36 percent, at 13,860.58. The Standard & Poor's 500
Index was down 3.85 points, or 0.26 percent, at
1,498.11. The Nasdaq Composite Index was down 0.18
points, or 0.01 percent, at 3,142.13.
The S&P 500 is up 5.1 percent this month, its best month
since October 2011 and its best January since 1997, using
The pan-European FTSEurofirst 300 was down 0.6
percent, with the MSCI world index down 0.2
percent. Disappointing results from heavyweights AstraZeneca and
Royal Dutch Shell also took their toll on market sentiment.
Falling German retail sales, stagnant French consumer
spending and a big quarterly loss at Deutsche Bank dashed hopes
of a rebound for European shares, which had their biggest daily
fall of the year on Wednesday. Those stocks are still up 3.7
percent this month.
Spot gold drifted down to $1,660.40 an ounce after
hitting a one-week high on Wednesday.
German Bund futures pared gains on Thursday, continuing a
recent shift away from safe-haven debt. Bund futures
were last 40 ticks higher on the day at 141.83, having risen as
high as 142.17.
Prices for U.S. Treasuries were volatile a day after the Fed
said it would continue buying bonds as the economy temporarily
stalled, but uncertainty about growth in the world's biggest
economy kept yields within recent ranges.
The benchmark 10-year U.S. Treasury note was up
2/32, with the yield at 1.9831 percent.