Dollar Soars on Kosovo Fears; Stocks Edge Down
The dollar jumped on Friday as some traders sought the safe haven of U.S. assets amid the escalating conflict over Kosovo.
But stocks and bonds failed to get much of a lift from the dollar’s renewed appeal.
The Dow industrials recovered from a 90-point drop at the opening but still finished off 14.15 points at 9,822.24.
In the broad market, losers had a 16 to 14 edge over winners on the New York Stock Exchange in dull trading.
The Nasdaq composite index fell 0.6% for the day.
In currency trading, the dollar rose to its strongest level yet against the euro, and had its best day against the yen in five weeks.
A euro bought just $1.077, down from $1.083 on Thursday, as traders fled the European currency. Likewise, the dollar leaped to 120.26 yen, up 2.13 yen.
“It’s dollar strength across the board,” said J.P. Neergaard, foreign exchange manager at Den Danske Bank. “This is what we’ve been looking for for a while.”
But the dollar-denominated securities in demand seemed to be shorter-term Treasury securities, as yields fell in that market.
By contrast, the 30-year Treasury bond yield edged up to 5.59% from 5.58% on Thursday.
In the stock market many traders appeared sidelined after Thursday’s 169-point Dow gain. For the week the Dow was off 0.8%, while the Nasdaq index was only marginally lower.
“Some of the people who believed that one or two airstrikes in Kosovo would solve our problems over there are having second thoughts,” said Alan Ackerman, senior vice president at Fahnestock. “Now many people are concerned with whether or not we will have to commit ground troops.”
Federal Reserve policymakers will meet Tuesday, and are expected to leave interest rates unchanged. The market’s major test in coming weeks, besides Kosovo, will be first-quarter corporate earnings reports, analysts said.
Among Friday’s highlights:
* Many energy stocks gained as oil prices continued to rebound, and as Prudential Securities raised its ratings on drilling stocks.
Ensco International jumped $2.13 to $14, Marine Drilling gained $1.31 to $10.31, Transocean Offshore surged $2 to $28.88 and R&B; Falcon rallied $1.13 to $8.13.
* Drug stocks were weak. Merck fell $2.19 to $80.38 after Glaxo Wellcome said a European Union regulatory panel recommended its new AIDS drug Ziagen be approved, a step toward full acceptance in the world’s second-biggest market. It will challenge Merck’s Crixivan.
* Dow component Goodyear Tire & Rubber slid $2.19 to $49.69. The company said it will expand a Canadian passenger tire plant and increase production capacity.
* Qualcomm rocketed $13.13 to $111.56, continuing its surge in the wake of its patent-dispute settlement with rival Ericsson.
* Among new issues, Valley Media, which distributes music and video to retail shops, jumped $4.13 to $20.13 on its first day of trading.
* Gold stocks fell as the metal hit a seven-month low of $279.70 an ounce. Canada joined other Western countries in calling on the International Monetary Fund to sell gold from its reserves to help poor countries pay debts.
Market Roundup, C4
