GLOBAL MARKETS-Stocks, oil rebound on economic data

Tue Feb 5, 2013 4:40pm EST

* U.S., European stocks rally on data after Monday's
sell-off
    * Oil prices also rise on signs of improving economies
    * Euro lifted by above-forecast euro zone services data
    * Treasuries prices fall as safe-haven allure ebbs


    By Herbert Lash
    NEW YORK, Feb 5 (Reuters) - Global equity markets and oil
prices bounced back on Tuesday after data showed the vast U.S.
services sector extended a three-year expansion in January,
while business activity in the euro zone showed signs of
recovery.
    U.S. and European stocks rallied, with the S&P 500 and
Nasdaq gaining more than 1 percent, recouping most of their
losses after a sharp sell-off the previous session that was
sparked by renewed worries about the euro zone crisis.
    A measure of world equity markets also was higher, though
only slightly, because of a decline in emerging market shares.
    Strong fourth-quarter earnings and signs of improving
economic growth suggested the trend for equities remains higher.
    "Yesterday was the first real down day of the year, which
shows that we are in this strong bull market. Today we are back
to the normal pattern. People are realizing that we've     
over-reacted to Europe yesterday," said Uri Landesman, president
of hedge fund Platinum Partners in New York.
    The Institute for Supply Management said its U.S. services
sector index eased slightly, to 55.2 last month from 55.7 in
December. The reading was in line with economists' forecasts,
according to a Reuters survey. 
    In Europe, Markit's Eurozone Composite PMI, based on
business activity across thousands of companies and a good gauge
of economic growth, rose in January to a 10-month high of 48.6
from 47.2 the previous month. 
    The day's data bolstered the view that the world economy was
improving, a sentiment that has lifted stock markets around the
globe and pushed the benchmark U.S. S&P 500 to a fresh five-year
intraday high on Tuesday. 
    In the biggest leveraged buyout since the financial crisis,
Michael Dell reached a deal to take computer maker Dell Inc
 private for $24.4 billion. The move will allow the
billionaire chief executive to try to revive the fortunes of his
company without Wall Street scrutiny. 
    Dell shares closed up 1.1 percent at $13.42.
    Corporate results also helped the rally. With 56 percent of
S&P 500 companies reporting, 68.7 percent posted earnings that
beat expectations, or better than the 65 percent rate over the
past four quarters or the 62 percent pace since 1994.
    The Dow Jones industrial average closed up 99.22
points, or 0.71 percent, at 13,979.30. The Standard & Poor's 500
Index  rose 15.58 points, or 1.04 percent, at 1,511.29.
The Nasdaq Composite Index gained 40.41 points, or 1.29
percent, at 3,171.58. 
    MSCI's all-country world equity index rose
0.28 percent to 354.97, while the FTSEurofirst 300 
index of top European shares closed up 0.3 percent at 1,154.47.
    U.S. Treasuries prices fell. The benchmark 10-year U.S.
Treasury note was down 17/32 in price to yield 2.016
percent.
    Brent crude oil rose 92 cents a barrel to settle at
$116.52, while U.S. crude futures settled up 47 cents at
$96.64.
    "We do not envisage prices receding for any great length of
time," said Carsten Fritsch, an analyst at Commerzbank. "The
supply-side risks still prevailing, shrinking OPEC supplies and
the brightening global economic outlook all suggest that such a
retreat is unlikely."
    The euro rose against the dollar and yen, returning to its
months-long trend of appreciation, as better-than-expected euro
zone data affirmed expectations that the European Central Bank
will keep policy steady when it meets this week.    
    The euro, which had taken the brunt of the selling and
fallen from a high of over $1.37 at the end of last week
to under $1.35 on Monday, rose 0.49 percent to trade at $1.3579.
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