Stocks retreat, dollar rallies after Fed's no action
02 Aug 2012
US stocks were down and the dollar rallied yesterday after the Federal Reserve acknowledged that the economic recovery had slowed, though, it came out with no new measures to spur growth.
Equities and the euro ruled higher as investors bet that central banks in the US and Europe would take strong steps to boost their economies and contain the euro- zone debt crisis.
The Fed said after its two-day meeting it was prepared to do more to support an ailing economy but belied analysts' expectations with its no action stance.
Attention now turns to a European Central Bank decision today with ECB president Mario Draghi expected to announce further bank purchases of Italian and Spanish bonds after his last week's statement of doing whatever it took to preserve the euro.
The MSCI world equity index was down 0.2 per cent to 315.46, while on Wall Street, the
Dow Jones industrial average retreated 32.55 points, or 0.25 per cent, to 12,976.13. The Standard & Poor's 500 Index fell 3.99 points, or 0.29 per cent, to close at 1,375.33.
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