NEW YORK: The euro snapped a five-day drop amid speculation that policy makers may expand Europe’s rescue fund. US stocks erased gains in the last hour of trading as Apple Inc.’s results and an unexpected drop in new U.S. home sales outweighed a rally in financial shares.
The euro added 0.8% to US$1.2155 as of 4 p.m. in New York. The S&P 500 was little changed at 1,337.91, reversing a 0.4% advance.
Apple tumbled 4.3% after reporting iPhone sales that missed projections. S&P’s GSCI gauge of 24 commodities gained 0.6%. The pound weakened after the U.K. economy shrank the most in three years. Yields on five-, seven- and 30-year Treasuries touched all-time lows for a third straight day.
Demand for new U.S. homes fell in June from a two-year high, indicating the housing recovery will be uneven. There are arguments in favor of granting a banking license to the permanent bailout fund, said Ewald Nowotny, a European Central Bank council member.
“We have a deepening recession in Europe, and a deceleration in North America, and that is leading investors to believe there’s going to be some sort of additional stimulus applied by the central banks,” said Peter Sorrentino. (Bloomberg/tw)