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(Adds oil, gold settlement prices)
* U.S. GDP data in Q4 not as bad as full year 2020
* Social-media trading restrictions boost Wall Street
By Herbert Lash
NEW YORK, Jan 28 (Reuters) - The dollar retreated and Wall
Street rallied on Thursday as investors looked past weak U.S.
GDP and jobless claims data to hopes of a rosier economy ahead
and welcomed restrictions on this week's social media-driven
trading frenzy.
Online trading platforms Robinhood and Interactive Brokers
restricted trading in shares of GameStop, BlackBerry
and other companies whose shares gained sharply this week
after they were targeted by an army of retail buyers.
Shares of GameStop plunged almost 68% from Wednesday's close
at one point after hitting $483 early in the session. The stock
had traded under $20 at the beginning of the year.
Hedge funds would have had more margin calls if GameStop had
kept going higher, said Thomas Hayes, managing member at Great
Hill Capital LLC in New York.
"When it backed off a little bit, the market breathed a sigh
of relief," Hayes said.
The main Wall Street indexes on Wednesday registered their
sharpest declines in three months after a squeeze on hedge funds
holding short positions in the social-media darlings.
On Thursday, MSCI's benchmark for global equity markets
rose 0.71% to 657.15, while the Dow Jones
Industrial Average rose 1.54%, the S&P 500 gained
1.57% and the Nasdaq Composite added 1.11%.
Stocks in Europe closed little changed as countries grappled
with new variants of the coronavirus amid extended lockdowns
that weigh on near-term economic growth. The broad FTSEurofirst
300 index added 0.01% to 1,554.45.
The safe-haven U.S. dollar fell in choppy trading and
riskier currencies, including the Australian dollar, reversed
early losses as stocks rebounded.
U.S. gross domestic product grew at a 4% annualized rate in
the fourth quarter, in line with economists' forecasts, though
for all of 2020 the economy contracted 3.5%, its worst
performance since World War Two.
Other data suggested a faster recovery than many expected.
Reports showed U.S. jobless claims were lower than expected at
847,000, compared with forecasts of 875,000.
The unemployment rate declined more quickly than expected at
year-end 2020 and the labor force will begin to recover in
mid-2021, said Ryan Sweet, head of monetary policy research at
Moody's Analytics.
The dollar index fell 0.236%, with the euro up
0.19% to $1.2131.
The Japanese yen weakened 0.10% versus the greenback
at 104.22 per dollar.
U.S. long-dated Treasury yields rallied from three-week
lows. The U.S. government sold $62 billion in U.S. seven-year
Treasury notes in a well-bid auction.
"The Treasury market is operating under the assumption that
we will be hitting a soft patch here in the first quarter," said
Kevin Flanagan, head of fixed income strategy at WisdomTree.
"The numbers are kind of being ignored," he said.
Oil prices fell slightly on concerns that delays to vaccine
rollouts and fresh travel curbs to prevent new coronavirus
outbreaks will depress demand. But that was offset by the impact
of a weaker dollar and big U.S. crude inventory drawdown.
Brent crude futures settled down 28 cents to $55.53
a barrel. U.S. crude futures fell 51 cents to settle at
$53.34 a barrel.
Silver prices rose about 7% as the dollar weakened, making
the metal cheaper for buyers outside the United States.
Some traders covered short positions on speculation of a
GameStop-like squeeze driven by retail investors. Calls to drive
silver prices higher by buying shares in silver miners and
exchange traded funds circulated on social media.
Spot gold prices fell -0.10% to $1,842.21 an ounce.
U.S. gold futures settled 0.4% lower to $1,837.90.
(Reporting by Herbert Lash, additional reporting by Devik Jain
in Bengaluru; Editing by Dan Grebler)
