March 19 (Bloomberg) -- U.S. stocks retreated, paring a global rally, as financial shares fell for the first time in three days on growing skepticism the Federal Reserve’s plan to buy bonds will revive the economy. Commodities surged the most this year, and the dollar weakened against the euro.
The Standard & Poor’s 500 Index dropped 1.3 percent to 784.04. The Dow Jones Industrial Average lost 85.78 points, or 1.2 percent, to 7,400.80. The Russell 2000 Index of small companies slumped 1.1 percent to 413.26. The MSCI World Index of 23 developed markets added 1.5 percent to 800.98, giving it an eight-day winning streak that’s the longest since 2006.
“With one hand the government is issuing debt, and with the other it’s repurchasing it using paper that it is printing,” said Lawrence Creatura, a Rochester, New York-based money manager at Federated Investors Inc., which oversees $407 billion. “This is a shell game that’s not going to be overlooked by global investors.”
Inflation Hedge
Commodities surged the most this year, led by precious metals and energy, on speculation that the Fed’s steps to revive the U.S. economy will spur demand for raw materials as a hedge against inflation. more...
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