Dollar continues its slide

albena
19 Apr, 2005
New York City

The currency was sent down by the growing worries on dropping U.S. stock prices. Investors continue to be nervous about the possibility of inflation in the middle of an estimated slowdown in economic growth despite strong earnings and a pair of merger announcements.

World markets tumbled abruptly reacting to Friday losses. Japan's Nikkei stock average plunged 3.8%.

In Europe, Britain's FTSE 100 closed down 1.32%, Germany's DAX index shed 2.55%, and France's CAC-40 decreased 2.05%.The FTSEurofirst 300 index of pan-European blue chips closed 1.8 percent lower at 1,063.6 points, its biggest daily drop since August.

A barrel of light crude closed at $50.37, down 12 cents, on the New York Mercantile Exchange partly reflecting bearish sentiment attributable to increasing stockpiles in the United States, the world's biggest energy consumer.

The Dow dropped 16.26, or 0.16%, to 10,071.25 after losing 420 points the past three sessions. The Standard & Poor's 500 index climbed 3.36, or 0.29%, at 1,145.98, and the Nasdaq composite gained 4.77, or 0.25%, to 1,912.92 boosted by chip stocks such as Intel Corp. (INTC.O: Quote, Profile, Research) , which climbed 9 cents to $22.21.

The Russell 2000 index of smaller companies was up 4.55, or 0.78%, at 585.33.

Bonds rose to 4.27% from 4.24% late Friday. The dollar fell against most major currencies, while gold prices rose.

Adobe Systems Inc. ((ADBE)) said it will pay $3.4 billion in stock to acquire software maker Macromedia Inc. Adobe shares dropped $5.89, or 9.7%, to $54.77, while Macromedia climbed $3.27, or 8.5%, to $36.72.

Electronics Boutique Holdings Corp. ((ELBO)) soared $14.09, or 34.3%, to $54.78 on announcing its acquisition by competitor GameStop Corp. for $1.44 billion in cash and stock, a 34% premium over Electronics Boutique's closing price on Friday. GameStop climbed $2.10 to $23.71.

Bank of America ((BAC)) saw a sharp rise in first-quarter profits thanks to the acquisition of FleetBoston and lower credit costs. The nation's third-largest bank beat profit estimates by 17 cents per share. Bank of America rose 45 cents to $44.73.

The stock of 3M Co. ((MMM)), a benchmark for the US economy, slid $4.96 to $75.90 although it posted a 12% rise in quarterly profits. The company makes items such as Scotch tape and Post-It notes.

Toy manufacturer Hasbro Inc. ((HAS)) posted loss for the quarter on higher costs and lower revenue. The company slid 2 cents per share for 1Q, while analysts had estimated profits of 4 cents per share. Hasbro’s shares gained 2 cents to $19.31.

Slowing U.S. growth and weakening expectations for a faster pace of U.S. interest rate raises have been helping push the dollar downward in recent sessions.

The dollar was trading at 107.32 yen by midafternoon, down 0.34 yen from late Monday in Tokyo and below the 107.55 yen it bought in New York later that day. The dollar continued its slide against the euro, which climbed above $1.30, as traders expected new economic data from the United States. The euro rose to $1.3028 late Tuesday afternoon from $1.2865 late Monday. Against the yen, European currency fell to 139.55 yen from 139.58 yen.