|
 Ukraine on Friday said Russia had launched a "direct invasion" of
its territory after Moscow sent a convoy of aid trucks across the
border into eastern Ukraine, where pro-Russian rebels are fighting
government forces.
Moscow, which has thousands of troops close to the Russian side of
the border, warned against any attempt to "disrupt" the convoy but
did not say what action it might take if Kiev's military intervened.
"The market probably is a little naive in thinking the Ukraine thing
is going to blow over pretty soon," said Erik Davidson, deputy chief
investment officer at Wells Fargo Private Bank in San Francisco. "We
will probably be talking about Ukraine through the winter."
The Dow Jones industrial average fell 38.27 points, or 0.22 percent,
to 17,001.22, the S&P 500 lost 3.97 points, or 0.2 percent, to
1,988.40, and the Nasdaq Composite added 6.45 points, or 0.14
percent, to 4,538.55.
Benchmark 10-year U.S. Treasuries ended up 2/32 of a point in price
to yield 2.40 percent. The 30-year Treasury traded up 22/32 of a
point in price to yield 3.15 percent and benefited from Europe's
weakness, geopolitical concerns and views that U.S. growth is as
robust as thought.
The U.S. dollar index, which values the greenback against a basket
of a half dozen major currencies, was up 0.2 percent at 82.310 after
setting a 2014 high of 82.456. The euro was off 0.35 percent against
the dollar at $1.323.
“She gave everybody a bone and didn’t commit herself to anything
that the market hadn’t already considered," Phil Orlando, chief
equity strategist at Federated Investors in New York, said of
Yellen's comments.
In a speech to a gathering of central bankers, closely watched for
hints on shifts in monetary policy, Yellen said the U.S. labor
market is still bruised from the Great Recession and that the Fed
should move cautiously in determining when interest rates should
rise.
The U.S. jobless rate has fallen more quickly than expected, but
Yellen said the economic disruption of the last five years has left
millions of workers sidelined, discouraged or stuck in part-time
jobs, which is not captured in the unemployment rate alone.
In such an environment "there is no simple recipe for appropriate
policy," Yellen said, arguing for a "pragmatic" approach that allows
officials room to evaluate data as it arrives without committing to
a preset policy path.
[to top of second column] |
At the same time, she said, the labor market may in fact be tighter
than it seems and the Fed may have to raise rates sooner and more
quickly than expected. Higher interest rates tend to boost the
allure of the dollar.
"On balance, the speech was a very gradual and nuanced move away
from Yellen's overtly dovish policy stance in the past toward a more
balanced view on the economy and on monetary policy," said Omer
Esiner, chief market analyst at Commonwealth Foreign Exchange in
Washington.
European shares dipped 0.27 percent after the Russian convoy of aid
trucks entered eastern Ukraine without Kiev's permission.
The MSCI world equity index, which tracks shares in 45 nations, was
down 0.29 percent.
Worries about the euro zone slipping toward deflation and near-zero
growth pinned German 10-year government bond yields firmly below 1
percent on Friday. [GVD/EUR]
In commodities trading, spot gold rose 0.22 percent to $1,280 an
ounce, after losing 1.3 percent on Thursday as rate rise
expectations sent it plowing through key support levels to a
two-month low.
Oil eased as the strong dollar and plentiful supplies continued to
pressure prices. October Brent crude ended down 36 cents to $102.27
a barrel. U.S. crude lost 31 cents to end at $93.65 a barrel
(Reporting by Michael Connor in New York; Additional Reporting by
Daniel Bases, Gertrude Chavez-Dreyfuss, Akane Otani and Chuck
Mikolajczak in New York; Editing by Dan Grebler)
[© 2014 Thomson Reuters. All rights
reserved.] Copyright
2014 Reuters. All rights reserved. This material may not be
published, broadcast, rewritten or redistributed. |
