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GLOBAL MARKETS-Stocks mixed after 6-day climb; Treasuries, oil rise
September 11, 2013 / 3:57 PM / 4 years ago

GLOBAL MARKETS-Stocks mixed after 6-day climb; Treasuries, oil rise

* Apple shares slide, weigh on tech sector
    * Verizon launches $49 billion bond deal
    * Unlocking of hedges for Verizon deal supports Treasuries
    * U.S. dollar near 7-week peak against yen

    By Ellen Freilich
    NEW YORK, Sept 11 (Reuters) - U.S. stocks were mostly lower
on Wednesday, as a slide in Apple weighed on the technology
sector, while the dollar rose to a near seven-week peak against
the yen and oil prices were slightly higher as tensions over
Syria eased.
    The reduced fears over Syria, after President Barack Obama
pledged Tuesday to explore a diplomatic plan by Russia to take
away Syria's chemical weapons, also drove gold to a three-week
    Jitters over Syria remained, however, and Obama voiced
skepticism about Russia's plan and sought support for using
force should diplomacy fail.
    "That is going to cause a little bit of angst, it won't
cause the market to implode. The only reason that would happen
is if these diplomatic efforts fail once again and the prospect
of a real strike looms large again," said Ken Polcari, director
of the NYSE floor division at O'Neil Securities in New York.
    The Federal Reserve's highly anticipated policy meeting next
week kept trading in check, with currency and the U.S.
government debt markets keenly awaiting whether the Fed will
begin to reduce its bond-buying program.
    The unwinding of hedges set ahead of Verizon Communications
Inc's record-breaking $49 billion corporate bond deal
helped support Treasuries prices. Verizon launched the deal to
partly finance its $130 billion buyout of its wireless
operations Verizon Wireless from Vodafone, setting a new record
for the largest ever corporate bond. 
    "The sheer size of this deal is impressive in and of
itself," said Bonnie Baha, who heads Global Developed Credit at
    "It just goes to show that despite the specter of higher
Treasury rates going forward, investor demand remains for
attractively priced corporate credit deals."
    Underwriters of the Verizon deal exited hedges that they had
put on in the last couple of days, undertaken to offset their
exposure to the massive Verizon offering, supporting Treasuries
    On Wall Street, Apple Inc's shares were down about
5.7 percent one day after it unveiled a high-end iPhone with a
fingerprint scanner as well as a cheaper model targeted at
emerging markets.
    The price of the lower-end iPhone was higher than expected
and raised concerns the company was not fighting hard enough
against Google Inc's market-dominating Android
operating system. Three brokerages downgraded their ratings on
Apple shares. 
    The retreat in Apple shares weighed heavily on the Nasdaq
Composite, which dropped 17.468 points, or 0.47 percent,
to 3,711.554. The S&P 500 lost 3.29 points, or 0.2
percent, to 1,680.7. The Dow Jones industrial average 
bucked the trend, rising 43.1 points, or 0.28 percent, to
    Globally, MSCI's 45-country world index rose
0.24 percent.
    U.S. Treasuries yields fell as stocks declined, and ahead of
the Treasury's sales of $21 billion in 10-year notes, the second
sale in $65 billion worth of new supply this week.
    Benchmark 10-year notes rose 4/32 in price.
Their yields eased to 2.96 percent from 2.97 percent on Tuesday
and a two-year high of 3.01 percent on Friday.
    Oil recovered some ground with Brent crude at
$111.55, above a 2-1/2-week trough of $110.59. The steadier
performance came after a 4 percent drop in the past two
sessions, its largest two-day fall since June.
    Gold inched back up to $1,361.71 an ounce having slid
to a three-week low of $1,356.85.
    In Europe, Britain's unemployment rate dipped to its lowest
level since late 2012 in the latest sign its economy is picking
    Sterling rose to a seven-month high against both the dollar
 and the euro, and to a four-year high against
the weakened Japanese yen, on the view the Bank of
England might raise rates sooner than heretofore expected. 
    The FTSEurofirst 300 pan-European share index stood
0.53 percent higher.
    Benchmark German government bonds tracked
minor gains by U.S. Treasuries.
    Italy's benchmark yields rose above Spain's for the first
time in 18 months amid concern about political instability and
about Italy's banks before an examination of all euro zone banks
by the European Central Bank in coming months. 
    Rome sold 11.5 billion euros of treasury bills at its
highest rate in over nine months. 
    The yen hovered near recent lows as the easing tensions over
Syria dented demand for the safe-haven Japanese currency, while
uncertainty about the Federal Reserve's stimulus plan kept the
dollar range-bound.
    The yen hit a seven-week low against the dollar and a
3-1/2-month trough versus the euro, before recovering losses. 
    Traders said uncertainty about Syria and the Fed could keep
major currencies in a range. The U.S. central bank meets next
Tuesday and Wednesday and investors will look for details on the
pace and timing of the central bank's plans to scale back its
bond buying program.
    "Until we can get through that meeting and see what the Fed
says, we're expecting continued consolidation here," said Eric
Viloria, currency strategist at
    The dollar was last down 0.33 percent at 100.07 yen, 
according to Reuters data. Analysts said the dollar would likely
hold above the 100 yen level in coming sessions.
    The euro was down 0.14 percent at 133.07 yen,
having hit a an intra-day peak of 133.36 yen, its highest since
May 22.

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