* Dollar retreats from gains against euro and yen
* Equity markets decline on soft housing, labor market data
* Bond prices rise on data, Brent oil edges higher
By Herbert Lash
NEW YORK, May 16 (Reuters) - Global equity markets traded
slightly lower and the dollar fell against the euro on Thursday
after reports on U.S. housing, labor and regional business
conditions pointed to soft spots in the American economy.
Factory activity contracted in the mid-Atlantic region in
May, ground-breaking for new homes tumbled in April and new
claims for jobless benefits spiked last week, according to three
separate reports.
Coupled with soft underlying inflation, the data suggests
weak demand as the U.S. economy entered the second quarter, and
it curbed expectations the Federal Reserve will scale back its
asset-buying program, which has bolstered the equity market.
"The data today was broadly weak and overall it drives home
the fact that the economic backdrop remains uneven, and that
will keep the Fed's foot on the accelerator by continuing to
engage in accommodative policy," said Tom Porcelli, chief U.S.
economist at RBC Capital Markets in New York.
Gold hit a four-week low and declined for a sixth straight
day for the first time in more than four years as investors
spooked by recent price falls favored other assets.
Spot gold prices fell $4.58 to $1,387.70 an ounce.
Ground-breaking for new U.S. homes plummeted more than
expected in April, the Commerce Department said, while the
Federal Reserve Bank of Philadelphia said its index of business
conditions in the U.S. Mid-Atlantic region fell.
The number of Americans filing new claims for unemployment
benefits climbed last week at the fastest pace in six months,
the Labor Department said, confounding analysts' expectations
for a more modest increase.
The dollar fell for the first time in six sessions against
the euro, which rose 0.15 percent against the dollar to
trade near $1.2905.
Major equity indexes traded near break-even, trimming
earlier losses, although the tech-heavy Nasdaq index was higher,
led by gains in Cisco Systems Inc (NasdaqGS: CSCO - news) .
Cisco shares surged 12.92 percent to $23.95 after the
network equipment maker posted a higher-than-expected quarterly
profit and said current-quarter revenue could increase.
The Dow Jones industrial average was down 17.13
points, or 0.11 percent, at 15,258.56. The Standard & Poor's 500
Index was down 3.12 points, or 0.19 percent, at 1,655.66.
The Nasdaq Composite Index was up 5.66 points, or 0.16
percent, at 3,477.27.
Other big tech gainers included Apple Inc (NasdaqGS: AAPL - news) , up 0.91
percent at $432.80; Hewlett-Packard, up 1.8 percent at
$21.35; and International Business Machines, up 0.9
percent at $205.18.
In other data, the U.S. Consumer Price Index posted the
biggest decline since December 2008, indicating inflation
pressure remains tame and giving the Fed latitude to maintain
its current monetary policy.
MSCI (NYSE: MSCI - news) 's world equity index fell 0.1 percent,
while the FTSE Eurofirst 300 index of top European
shares edged down 0.02 percent to close at 1,245.45.
U.S. Treasuries prices advanced and German Bund futures
jumped the most in six weeks as the U.S. data raised worries
about the economy and underscored the lack of price pressures.
The benchmark 10-year U.S. Treasury note was up
21/32 in price to yield 1.8653 percent. German Bund futures
jumped 67 ticks to settle at 145.31, its biggest daily
gain since March 27.
Oil prices rose but Brent oil futures remained below $104 a
barrel as the soft U.S. economic data added to a bearish outlook
on demand.
Brent settled 12 cents higher at $103.80 a barrel,
while U.S. oil gained 86 cents to settle at $95.16.
