GLOBAL MARKETS-Stocks, Brent oil rise on data, central bank hope

Thu Feb 28, 2013 12:31pm EST

* Dollar up on Italy deadlock and before U.S. spending cuts

* European shares gain on confidence in central bank support

* U.S. factory, jobless claims help lift sentiment

By Herbert Lash

NEW YORK, Feb 28 (Reuters) - Global equity markets and Brent crude oil rose on Thursday, pulled higher by encouraging U.S. economic data and renewed confidence that major central banks will keep taking steps to support their economies.

Italian bonds pared recent losses on reduced worries about the country's political deadlock, helping to whet the appetite for riskier assets such as stocks, oil and other commodities.

A drop in new U.S. claims for jobless benefits last week and a sharp rise in factory activity in the Midwest in February added to recent data that suggests the U.S. economy is improving.

The U.S. Commerce Department said gross domestic product rose 0.1 percent in the fourth quarter - reversing a previous reading showing a contraction, but less than the 0.5 percent gain forecast by analysts in a Reuters poll.

Investors, however, largely shrugged off the anemic economic growth of the fourth quarter to focus on a brighter picture going forward.

"The jobless claims continue to show further signs of improvement in the labor market. It's encouraging," said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co. LLC in New York.

"We knew that it was a bad quarter, and we knew that there was a confluence of negative inputs such as from government inventories," he said of the fourth-quarter GDP. "We don't expect this to continue in 2013."

The Dow Jones industrial average was up 4.99 points, or 0.04 percent, at 14,080.36. The Standard & Poor's 500 Index was up 1.90 points, or 0.13 percent, at 1,517.89. The Nasdaq Composite Index was up 6.48 points, or 0.20 percent, at 3,168.74.

The U.S. equity market lacks catalysts as it digests its recent move higher, according to Kevin Caron, market strategist at Stifel, Nicolaus & Co in Florham Park, New Jersey, where he helps oversee $120 billion in assets under management.

"That's why I think you're seeing a fairly listless trading environment today," Caron said.

In Europe, the FTSEurofirst 300 index of top regional shares rose 0.9 percent to close at 1,171.47.

MSCI's all-country world equity index rose 0.52 percent to 354.64.

In oil markets, Brent crude for April delivery gained 46 cents to $112.33 a barrel.

In contrast, U.S. oil for April delivery slipped 20 cents to $92.56 a barrel.

Gold headed toward its longest run of monthly declines in more than 16 years as an improved economic backdrop and reduced concerns about inflation blunted its appeal to investors.

Spot gold fell 1.3 percent to $1,577.00 an ounce, on course for a monthly drop of more than 4 percent. The precious metal has been in the red for five straight months - the longest such losing streak since late 1996 to early 1997.

The dollar rose against the euro and yen as investors embraced its perceived safety against the backdrop of the Italian stalemate and less than 24 hours before automatic federal spending cuts are enacted in the United States.

The euro extended losses against the Japanese yen and U.S. dollar as month-end positioning and fears about a stalemate in Italy prompted investors to shed holdings of the currency.

The euro last traded at $1.3085, down 0.4 percent for the day.

The euro's upside is seen as limited by concerns that political instability will stall Italian economic reforms and reignite the euro-zone debt crisis.

U.S. Treasuries rose as the potentially growth-damping impact of prospective U.S. government spending cuts fed the bid for safe-haven U.S. debt.

The benchmark 10-year U.S. Treasury note gained 3/32 in price to yield 1.8894 percent.

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.