US stocks dip as dollar strengthens again

NEW YORK (AFP) - US stocks finished lower Wednesday in choppy trade as the dollar hit a new 12-year high against the euro.

The Dow Jones Industrial Average dropped 27.55 points (0.16 per cent) to 17,635.39.

The broad-based S&P 500 shed 3.92 (0.19 per cent) at 2,040.24, while the tech-rich Nasdaq Composite Index lost 9.85 (0.20 per cent) at 4,849.94.

Equity markets continued to watch the dollar, which rose to a fresh 12-year high against the euro two days after the European Central Bank launched a massive government bond-buying stimulus programme.

The Federal Reserve, meanwhile, is winding down its extraordinary stimulus.

Some analysts have expressed worry at the speed of the dollar's ascent and the possible drag on US exports.

"You have central banks at a crossroads," said Brent Schutte, market strategist at BMO Global Asset Management.

Apple fell 1.8 per cent following a major outage preventing consumers from shopping on iTunes and other Apple vending sites worldwide.

Salix Pharmaceuticals jumped 7 per cent as Endo International launched an US$11.25 billion (S$15.6 billion) bid for the company, challenging an existing purchase agreement of Salix announced by Valeant Pharmaceuticals International.

Endo fell 1.4 per cent, while Valeant dropped 3.9 per cent.

Mylan, another pharmaceutical company, jumped 6.7 per cent as it launched generic versions of several medications, including treatments for opioid dependence and alcoholism.

Large banks rose ahead of the release of Federal Reserve decisions on whether the largest US banks have enough capital after stress tests to continue with their dividend and share buyback programs.

Bank of America gained 2 per cent, while Citigroup rose 2.2 per cent.

EMC, which specialises in cloud computing and other data storage technology, dropped 4.6 per cent following a downgrade by Wells Fargo.

Bond prices rose. The yield on the 10-year US Treasury dropped to 2.11 per cent from 2.13 per cent Tuesday, while the 30-year declined to 2.68 per cent from 2.73 per cent. Bond prices and yields move inversely.

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