GLOBAL MARKETS-Stocks tick higher; euro retreats before ECB meet

Wed Mar 6, 2013 12:44pm EST

* U.S. crude oil trades below $90, near 2013 low
    * MSCI world share index just under June 2008 high
    * Euro dips as traders mull ECB rate cut chances


    By Rodrigo Campos
    NEW YORK, March 6 (Reuters) - The blue chip Dow Jones index
extended its record-breaking run on Wednesday, but world stock
markets showed signs of weakness despite strong gains in Asia,
while the euro slid against the dollar a day before a European
Central Bank meeting.
    U.S. data showing a steady manufacturing sector and
surprisingly strong gains in private employment supported equity
markets, but major indexes weakened as investors questioned the
strength of the rally.
    The dollar extended gains against both the euro and the yen.
    Concerns that the ECB at its policy meeting on Thursday may
signal future interest-rate cuts pressured the euro. The Bank of
Japan will also meet this week, beginning a two-day meeting on
Thursday, but it is expected to hold its fire this week.
    The market is turning its attention to the BoJ's April 3-4
meeting, the first policy review under its new governor,
Haruhiko Kuroda, who is an advocate of aggressive monetary
easing.
    The MSCI world index was up less than 0.1
percent.
    "When everybody hears that the market is at new highs, the
smarter money starts to shift out and makes a profit by selling
to people who are looking to get in," Central Markets senior
broker Joe Neighbour said.  
    The Dow Jones industrial average rose 20.4 points or
0.14 percent, to 14,274.17, the S&P 500 lost 0.71 points
or 0.05 percent, to 1,539.08 and the Nasdaq Composite 
dropped 4.68 points or 0.15 percent, to 3,219.45. 
    The Dow hit a record intraday high and the broader S&P 500
was 1.5 percent away from its all-time closing record.
    The pan-European ESTOXX 50 slipped 0.1 percent
and the FTSEurofirst 300 fell 0.3 percent. 
    The Nikkei hit a 4-1/2-year high helped by a record
closing on Wall Street on Tuesday and prospects of a
reflationary policy in Japan to revive growth.
   
    EURO, TREASURIES WEAKEN
    Better-than-expected U.S. jobs figures dented the allure of
Treasuries ahead of the government's closely watched monthly
payrolls report on Friday.
    The benchmark 10-year U.S. Treasury note was
down 8/32, the yield at 1.9237 percent.
    "I would not say we're headed toward a robust pace anytime
soon, but I do think it's encouraging that the economy seems to
be gathering a little more steam," said Russell T. Price, senior
economist with Ameriprise Financial Services Inc in Troy,
Michigan.
    The euro fell against the U.S. dollar ahead of the ECB
meeting and the remarks afterwards by ECB President Mario
Draghi.
    "The focus is tomorrow's ECB meeting, where interest rates
are expected to remain on hold at 0.75 percent. However, there
is wide debate about President Draghi's tone during the press
conference," said Camilla Sutton, chief currency strategist at
Scotiabank in Toronto. 
    "We expect the ECB to ultimately turn more dovish, but that
it occurs in April not tomorrow."
    The euro was down 0.5 percent against the greenback
at $1.2989.
    As expected, official data confirmed the euro zone ended the
year in its second recession since 2009. Eurostat data showed
Germany, the bloc's biggest economy, grew in the quarter, though
at a crawl. France, Spain and Italy, the other three big
economies of the euro zone, all contracted. 
    Copper turned lower after a two-day rebound, weighed by
uncertainty about metals demand in China, the world's top
consumer, and economic growth in Europe.
    Three-month copper fell 1 percent to $7,698 a ton,
erasing initial gains that took it above $7,800.
    Areas of concern for the global economy remain, including
the Chinese government's move to cool the country's overheated
property market, the possible economic impact of U.S. spending
cuts and political deadlock in Italy.
    Brent oil fell 0.7 percent, below $111 a barrel,
while U.S. crude hovered near $90, down 0,8 percent.
    U.S. crude oil inventories rose more than forecast last week
while distillates stocks fell more than expected as refinery
utilization rates posted a surprise drop, data from the Energy
Information Administration showed on Wednesday.
    Gold was slightly higher on expectations central banks would
maintain loose monetary policy but prices were capped as
investors favored higher-yielding assets on the back of strong
U.S. economic data.
    Spot gold edged up 0.2 percent to $1,578.85 an ounce.