Dec. 22 (Bloomberg) -- The Dollar Index snapped a three-day gain, Treasuries trimmed losses and stocks fluctuated as U.S. government data showed the economy grew faster than previously estimated last quarter and a measure of inflation rose at the slowest pace on record. The Dollar Index, which tracks the U.S. currency against those of six trading partners, fell 0.2 percent at 9:03 a.m. in New York. Ten-year Treasury yields were little changed at 3.31 percent after rising four basis points earlier. Standard & Poor’s 500 Index futures drifted between gains and losses after the benchmark index rose to the highest since September 2008 yesterday. Greek bonds slid and the Swiss franc rallied to a record versus the euro after Fitch Ratings said it may cut Greece’s debt rating to junk. The world’s largest economy expanded at a 2.6 percent annual rate last quarter, above the government’s previous estimate of 2.5 percent and below the 2.8 percent median forecast from economists in a Bloomberg survey. The Federal Reserve’s preferred inflation gauge, which is tied to consumer spending and strips out food and energy, rose at a 0.5 percent pace for the slowest growth in records beginning in 1959. “The economy is on the right track, but people need to understand that it’s happening at a moderate pace,” said Jeffrey Saut, chief investment strategist at Raymond James & Associates in St. Petersburg, Florida, who helps manage $240 billion. “I’m constructive going into 2011. However, with sentiment being so bullish for stocks, you have the potential for a pullback or air pocket over the next month.” Dollar Depreciates The dollar depreciated 0.3 percent against the euro and weakened 0.2 percent compared with the yen. The franc strengthened against all 15 major peers. The pound fell 0.4 percent versus the euro after data from the Office for National Statistics showed the British economy expanded 0.7 percent in the third quarter, compared with an initial estimate of 0.8 percent growth. Oil rose 0.4 percent to $90.19 a barrel, and gold fluctuated near $1,389 an ounce. The yield on the 10-year Greek security was more than 12 percent for the sixth consecutive day after Fitch Ratings said yesterday that the nation may have its credit cut to non- investment grade within six weeks after a review of the government’s “fiscal sustainability.” Greece is rated BBB- at Fitch, its lowest investment-grade rating. Credit-default swaps insuring Greek debt rose 16.5 basis points to a four-week high of 986, compared with a record closing price of 1,126 on June 24, according to CMA prices. Nike Sinks S&P 500 futures were little changed after the benchmark index yesterday erased its plunge that followed Lehman Brothers Holdings Inc.’s collapse in 2008 amid speculation the recovery is gathering momentum. Nike Inc., the world’s largest maker of athletic shoes, sank 5.7 percent after orders fell short of some analysts’ estimates. Xilinx Inc. slid 4.8 percent after the chipmaker said sales will drop as much as 9 percent in the third quarter from the previous three months because of weak demand. The Stoxx 600 advanced 0.1 percent. ARM Holdings Plc soared 8.4 percent as people familiar with the plans said Microsoft Corp. is preparing to offer a version of its Windows operating system that runs on the U.K. chip designer’s technology. Aker Solutions ASA, Norway’s largest engineering company, climbed 5.4 percent after Jacobs Engineering Group Inc. agreed to buy some of its units. The MSCI Emerging Markets Index advanced 0.1 percent to the highest on a closing basis in a week. Russia’s Micex Index climbed 0.7 percent as OAO Gazprom rallied on higher crude prices. China’s Shanghai Composite Index declined 0.9 percent, led by consumer companies and banks, after the government raised fuel prices and Barclays Capital analysts said new regulations will cut lenders’ capital adequacy ratios and profits. --With assistance from Nicolas Johnson and Norie Kuboyama in Tokyo, Claudia Carpenter, Justin Carrigan, Alexis Xydias, Michael Patterson, Paul Armstrong, Abigail Moses and Andrew Rummer in London. Editor: Michael P. Regan To contact the reporter on this story: Daniel Tilles in London at dtilles@bloomberg.net. To contact the editor responsible for this story: Michael P. Regan at mregan12@bloomber.net

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