* U.S. dollar extends losses with key breaches in sight
* Silver hits record near $50, sets all-time high
* U.S. stocks trade flat as economic data disappoints
* Government debt prices gain after U.S. jobless, GDP data
(Freshens prices)
By Herbert Lash
NEW YORK, April 28 (Reuters) - The dollar extended losses
on Thursday, sparking a record surge in silver, but Wall Street
rebounded on bets a dose of poor economic data will not slow
growth enough to derail a rally in equities.
Spot silver <XAG=> hit an all-time high of $49.51 an ounce
as the dollar's slide and yet another record in gold triggered
heavy speculative buying. For details see [].
Oil prices faltered on the Commerce Department data that
showed U.S. gross domestic product growth for the first quarter
slowed to a 1.8 percent annual pace, or two-tenths of a percent
less than markets had expected. []
But U.S. government debt prices rose after the readings of
weaker-than-expected jobs and economic growth reinforced a view
that the Federal Reserve will leave interest rates near zero
well into next year. []
The dollar drifted lower a day after the U.S. Federal
Reserve emboldened bearish sentiment by signaling it would
retain its accommodative monetary policy. []
The ultra-loose policy has been a bane for the dollar. But
low U.S. interest rates have been a boon for the euro, which is
up nearly 11 percent this year.
The Fed statement and a news conference by Fed Chairman Ben
Bernanke indicated authorities plan to "monetize our debt, and
basically to devalue the dollar," said Robert Lutts, chief
investment officer of Cabot Money Management.
"The metal markets are recognizing that and it is being
priced in. What monetization means is that, down the road, we
will have more inflation," he said.
The euro rose to $1.4821 <EUR=>, after hitting a 17-month
high of $1.4882 on trading platform EBS.
The dollar was down 0.83 percent at 81.53 yen <JPY=>.
The U.S. dollar index <.DXY>, a basket of six currencies,
fell to its lowest since July 2008. It recovered slightly but
was still down 0.53 percent.
U.S. STOCKS TAKE DATA IN STRIDE
On Wall Street, stocks initially faltered on the signs of
slower growth, but investors said they needed to see more data
before calling an end to the rally in equities.
The volatile weekly U.S. jobless numbers, which showed
first-time claims for unemployment benefits jumped to 429,000
last week, well above a Reuters consensus forecasts of 392,000,
may be a silver lining.
"At the moment, we regard the rise (in claims) as
technical," said Chris Rupkey, chief financial economist of
Bank of Tokyo/Mitsubishi UFJ in New York.
"We need to see initial unemployment claims fall sharply
below 400,000 in upcoming weeks to make sure the economy is not
slowing due to the latest headwind of higher gasoline prices."
The Dow Jones industrial average <> was up 72.05
points, or 0.57 percent, at 12,763.01. The Standard & Poor's
500 Index <.SPX> was up 5.01 points, or 0.37 percent, at
1,360.67. The Nasdaq Composite Index <> was up 3.16
points, or 0.11 percent, at 2,873.04.
Despite a listless market, the Nasdaq was still trading
near a 10-year closing high reached Wednesday. Both the Dow and
the S&P 500 hit fresh intraday highs on Thursday that were near
levels not seen since mid-2008.
Major world stock indexes had surged to near three-year
highs on Wednesday after Fed policy-makers signaled low U.S.
interest rates will remain in place for some time.
The MSCI index of world stocks <.MIWD00000PUS> was up 0.8
percent.
U.S. consumer spending did not slow as much as economists
had feared, leaving many hopeful of a re-acceleration in the
pace of growth in the second quarter.
"Investors are willing to look through the GDP data because
most of the weakness was beyond the consumer," said Jack Ablin,
chief investment officer of Harris Private Bank in Chicago.
Spot silver <XAG=> was up 72 cents at $48.48 an ounce.
The benchmark 10-year U.S. Treasury note <US10YT=RR> was up
11/32, to yield 3.32 percent.
U.S. crude for June delivery <CLc1> settled up 10 cents at
$112.86 a barrel. In London, ICE Brent June crude <LCOc1> ended
at $125.02, off just 11 cents for the session.
Spot gold prices <XAU=> rose $9.00 to $1,535.40 an ounce.
(Reporting by Gertrude Chavez-Dreyfuss, Angela Moon and Ellen
Freilich in New York and Atul Prakash, Emelia Sithole-Matarise
and Rebekah Curtis in London; Writing by Herbert Lash; Editing
by James Dalgleish)
