GLOBAL MARKETS-U.S., European shares rise on data, yen falls

Fri Feb 15, 2013 10:56am EST

* U.S. consumer confidence gives U.S. equities slight lift

* Yen slumps as bearish bets increase after G20 impasse

* Oil slides below $117 a barrel

By Herbert Lash

NEW YORK, Feb 15 (Reuters) - The yen slid against the euro and dollar on Friday after investors piled on bearish bets, while U.S. and European stocks edged higher on surprising U.S. consumer sentiment and optimism that a surge in dealmaking suggests valuations aren't too pricey.

Also lifting Wall Street were data that showed manufacturing in New York state expanded in February for the first time in seven months, boosted by a surge of new orders, and a survey that reported improved U.S. consumer sentiment in February.

The Thomson Reuters/University of Michigan preliminary reading on the overall index of consumer sentiment rose to 76.3 from 73.8 in January, topping economists' forecasts of 74.8.

"This is unexpected given the increase in gas prices and payroll taxes. It reflects the recovery in housing prices and the stock market. This is a welcome event and it should be embraced by the market," said Jim Awad, managing director at Zephyr Management in New York.

U.S. and European markets advanced on the report, while a measure of global equity activity, MSCI's all-country world index traded slightly lower at 355.87.

The Dow Jones industrial average was up 13.44 points, or 0.10 percent, at 13,986.83. The Standard & Poor's 500 Index was up 0.82 points, or 0.05 percent, at 1,522.20. The Nasdaq Composite Index was up 2.65 points, or 0.08 percent, at 3,201.31.

The benchmark S&P 500, up almost 7 percent this year, is facing strong technical resistance near the 1,525 level. But investors, expecting further advances in the quarter, have held back from locking in profits and kept stocks from tumbling.

The S&P is on track to register its seventh straight week of gains by the close of trading Friday, a feat not seen since a run of consecutive weekly gains that ended in January 2011.

A surge in merger and acquisition activity, with more than $158 billion in deals announced in the first 45 days of the year, has supported the equity market as it indicates healthy valuations and a bright economic outlook.

"No retracement of this move is positive; it shows underlying support for this market," said Art Hogan, managing director of Lazard Capital Markets in New York.

A flurry of deal-making, highlighted by news on Thursday that Warren Buffett's Berkshire Hathaway and Brazilian private equity group 3G would buy ketchup maker H.J. Heinz Co for $23.2 billion, is good for the market, he said.

"You don't go into M&A if you don't have a positive outlook," Hogan said.

The dollar extended gains against the yen and pared gains versus the euro after the report on U.S. consumer sentiment.

Earlier, investors added to bets against the yen amid uncertainty about a Group of 20 summit in Moscow and questions about who may be the next leader of Japan's central bank.

G20 officials struggled to find common ground on currency manipulation at a summit which looked likely to be dominated by the ultra-loose monetary polices of major developed countries.

A draft communique prepared for G20 finance leaders omits part of this week's Group of Seven statement declaring fiscal and monetary policy may only be used for domestic economic aims, a G20 delegate said on Friday.

The dollar last traded at 93.65 yen, up 0.9 percent on the day. It had been trading at about 93.34 before the release of the data.

The euro last traded at $1.3359, down 0.01 percent on the day.

Brent crude oil fell below $117 per barrel on Friday and was heading for its first weekly loss in five.

Brent futures for April tumbled to a low of $116.28 a barrel, down $1.72, before recovering slightly to around $116.65. The contract was heading for its first weekly loss since the first half of January.

U.S. crude shed $1.98 to $95.33 a barrel.

The benchmark 10-year U.S. Treasury note was down 8/32 in price to yield 2.0243 percent.

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