* 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 record surge in silver, freshens prices)
By Herbert Lash
NEW YORK, April 28 (Reuters) - The U.S. dollar extended
losses on Thursday, sparking a record surge in silver, while
Wall Street faltered on reports of disappointing data that
suggested slower U.S. economic growth than expected.
Spot silver <XAG=> jumped to an all-time high of $49.51 an
ounce as the dollar's further slide and a rally in gold
triggered heavy speculative buying. For details see:
[]
Silver's record rise came 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, a rate
that turned oil prices lower. [] []
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 in the first
quarter to an annual growth rate of 1.8 percent -- a sharp
drop from 3.1 percent in the fourth quarter of 2010.
Adding to the economic concerns, claims for jobless
benefits jumped to 429,000 last week -- well above the 392,000
in the 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 $1.4805 <EUR=>, after hitting a 17-month
high of $1.4882 on trading platform EBS.
The dollar was down 0.78 percent at 81.57 yen <JPY=>.
The U.S. dollar index <.DXY>, a basket of six currencies,
fell early Thursday to its lowest level since July 2008. At
midday in New York, it had recovered slightly, but was still
down 0.49 percent.
U.S. STOCKS TAKE DATA IN STRIDE
On Wall Street, stocks held up relatively well, with the
Dow industrials up 0.3 percent and the benchmark S&P 500 up
0.1 percent. Investors said they needed to see more data
before calling an end to the rally in equities.
The volatile weekly jobless claims could have a silver
lining.
"At the moment, we regard the rise (in claims) as
technical," said Chris Rupkey, chief financial economist of
Bank of Tokyo/Mitsubishi UFJ in New York.
"We need to see initial unemployment claims fall sharply
below 400,000 in upcoming weeks to make sure the economy is
not slowing due to the latest headwind of higher gasoline
prices."
Shortly after midday, the Dow Jones industrial
average<> was up 43.44 points, or 0.34 percent, at
12,734.48. The Standard & Poor's 500 Index <.SPX> was up 1.64
points, or 0.12 percent, at 1,357.30. The Nasdaq Composite
Index <> was down 4.80 points, or 0.17 percent, at
2,865.10.
Although the Nasdaq was down slightly, it was still
trading near its 10-year closing high reached on Wednesday.
Earlier on Thursday, both the Dow and the S&P 500 hit fresh
intraday highs that were near levels not seen since mid-2008.
The Dow climbed as high as 12,737.73, while the S&P 500 rose
as high as 1,358.60.
Major world stock indexes had surged to near three-year
highs on Wednesday after the policymakers at the Federal
Reserve signaled low interest rates will continue.
On Thursday, the MSCI index of world stocks
<.MIWD00000PUS> was up 0.69 percent at midday.
Consumer spending did not slow as much as economists had
feared, leaving many hopeful of a re-acceleration in the pace
of growth in the second quarter.
"Investors are willing to look through the GDP data
because most of the weakness was beyond the consumer," said
Jack Ablin, chief investment officer of Harris Private Bank in
Chicago.
Spot silver <XAG=> was up $1.08 at $48.84 an ounce at
12:46 p.m. (1646 GMT).
The benchmark 10-year U.S. Treasury note <US10YT=RR>, up
7/32 in price before the reports were released, posted a 12/32
gain afterwards, their yields easing to 3.32 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> rose 18 cents to $125.31 a
barrel.
U.S. light sweet crude oil <CLc1> fell 4 cents to
$112.72.
Spot gold prices <XAU=> rose $7.10 to $1,533.50 an ounce
from $1,526.40 late Wednesday in New York.
(Reporting by Gertrude Chavez-Dreyfuss, Angela Moon and Ellen
Freilich; Atul Prakash, Emelia Sithole-Matarise and Rebekah
Curtis in London; Writing by Herbert Lash; Editing by Jan
Paschal)
