* US dollar extends losses with key breaches in sight
* U.S. stocks trade flat as economic data disappoints
* Government debt prices gain after US jobless, GDP data
* Crude oil pares gains on slowing U.S. economy
(Adds fresh prices)
By Herbert Lash
NEW YORK, April 28 (Reuters) - The U.S. dollar extended
losses on Thursday and Wall Street stocks faltered on news that
U.S. first quarter economic growth braked sharply while the
number of Americans seeking jobless benefits rose.
Crude oil prices pared some gains after U.S. gross domestic
product for the first quarter slowed to a 1.8 percent annual
pace, or two-tenths of a percent more than expected. For
details see: [] []
U.S. Treasuries prices rose and German government bond
futures extended gains to hit session highs after the Commerce
Department said the U.S. economy had slowed from 3.1 percent
growth in the fourth quarter of 2010.
Adding to the economic concerns, claims for jobless
benefits jumped to 429,000 last week, higher than the 392,000
Reuters consensus forecast.
The dollar drifted lower a day after the U.S. central bank
emboldened bearish sentiment by signaling it would retain an
accommodative monetary policy. []
The ultra-loose monetary policy has been a bane for the
dollar but low U.S. interest rates have been a boon for the
euro, which is up nearly 11 percent this year.
"The reality is that low short-term U.S. rates for an
extended period are guaranteed, regardless of how the Fed's
language evolves this year, until the Fed starts intervening in
the markets differently," said Lena Komileva, global head of
G10 strategy at Brown Brothers Harriman in London.
The euro rose to $1.4819 <EUR=>, after hitting a 17-month
high of $1.4882 on trading platform EBS.
The dollar was down 0.8 percent at 81.53 yen <JPY=>, with
options expiries reported at 81.50 and 82.00 yen.
The U.S. dollar index <.DXY>, a basket of six currencies,
fell to its lowest level since July 2008 early Thursday, before
recovering to be down 0.54 percent at 73.123 midsession in New
York.
Wall Street stocks held up relatively well, trading near
break-even, and investors said they needed to see more data
before calling an end to the rally in equities.
"Over the next week or so we will get a little bit better
sense for whether recent data is something to be concerned
about or just a temporary slowdown," said Michael Sheldon,
chief market strategist at RDM Financial in Westport,
Connecticut.
The Dow Jones industrial average <> was up 16.46
points, or 0.13 percent, at 12,707.42. The Standard & Poor's
500 Index <.SPX> was up 0.55 points, or 0.04 percent, at
1,356.21. The Nasdaq Composite Index <> was down 4.54
points, or 0.16 percent, at 2,865.34.
Major world stocksmarkets had surged to near three-year
highs on Wednesday after the policy-makers at the Federal
Reserve signaled continued low interest rates.
While U.S. first quarter corporate earnings have been good,
there were signs higher energy costs were affecting some
companies. Procter & Gamble Co <PG.N> lowered the high end of
its profit forecast amid rising materials costs. Procter shares
fell 3 cents to $63.99.
Analysts said equities may advance in the near term on
strong earnings and on hopes U.S. monetary policy will stay
ultra loose. []
Benchmark 10-year notes <US10YT=RR>, up 7/32 in price
before the reports were released, posted a 14/32 gain
afterwards, their yields easing to 3.31 percent from 3.36
percent on Wednesday.
The Bund future <FGBLc1> rose to 122.69 from 122.43 just
before release of the data. The cash 10-year Bund yield was
down four basis points at 3.292 percent <DE10YT=TWEB>.
Brent crude futures <LCOc1> were up 69 cents at $125.82 a
barrel.
U.S. light sweet crude oil <CLc1> rose 37 cents to
$113.13.
Spot gold prices <XAU=> rose $7.69 to $.1534.00 an ounce.
(Reporting by Gertrude Chavez-Dreyfuss, Edward Krudy and Ellen
Freilich; Atul Prakash, Emelia Sithole-Matarise and Rebekah
Curtis in London; Writing by Herbert Lash)
