GLOBAL MARKETS-Shares advance, euro slips after data

Tue Apr 2, 2013 10:52am EDT

* S&P 500 index inches toward all-time intraday high

* Treasuries, gold retreat as safe-haven demand wanes

* ECB, BOJ meet later this week; U.S. jobs report also due

By Wanfeng Zhou

NEW YORK, April 2 (Reuters) - Major stock markets rose on Tuesday, with the U.S. S&P 500 index nearing its all-time intraday high, while the euro slipped against the dollar after data showed manufacturing across the euro zone fell deeper into contraction territory last month.

Gains in stocks dampened demand for safe-haven instruments, driving Treasury and gold prices lower, but lingering concern about the broader impact of the Cyprus bailout and caution ahead of key events this week limited moves.

The Bank of Japan and the European Central Bank both hold policy meetings this week. On Friday, the U.S. government will release the all-important payrolls report for March.

On Wall Street, stocks rebounded from the previous session, as healthcare shares surged on prospects of a boost to earnings. The group gained as planned cuts in U.S. government payments for private Medicare Advantage insurers did not materialize.

"Given how lean these companies are, this news is pretty significant and could mean a 10 to 15 percent increase in earnings," said Phil Orlando, chief equity market strategist at Federated Investors in New York.

The benchmark S&P 500 index last week set an all-time closing high, but has thus far been unable to reach its intraday record of 1,576.09, an important psychological level for investors.

The Dow Jones industrial average was up 83.84 points, or 0.58 percent, at 14,656.69. The Standard & Poor's 500 Index was up 9.19 points, or 0.59 percent, at 1,571.36. The Nasdaq Composite Index was up 24.45 points, or 0.75 percent, at 3,263.62.

European shares rallied after a two-week slide as M&A activity helped lift sentiment. Europe's FTSEurofirst 300 index gained 1.1 percent to 1201.83 points.

The broad MSCI world equity index rose 0.4 percent to 360.03 points.

The euro fell 0.1 percent to $1.2832 after Markit's Eurozone Manufacturing PMI fell in March to 46.8 from 47.9 in February, extending to a 20th month its run below the 50 mark that separates growth and contraction.

The data boosted expectations European Central Bank President Mario Draghi would strike a more dovish tone at Thursday's monetary policy outlook meeting and could provide hints about a possible rate cut.

"We expect euro zone fundamentals to deteriorate further -- this combined with outflow pressures should keep the euro's downward trend intact," said Camilla Sutton, chief currency strategist, at Scotiabank in Toronto.

The dollar rose 0.2 percent to 93.38 yen. The BoJ meets on April 3-4 and is widely expected to ramp up its bond buying and to extend the maturities of the bonds it purchases under new Governor Haruhiko Kuroda.

Benchmark 10-year Treasury notes were down 7/32, their yields rising to 1.86 percent from 1.84 percent on Monday.

In commodities trading, spot gold hit an intraday high of $1,603.60 an ounce, before falling to $1,583 an ounce, down from $1,598.40 on Monday.

Brent slipped 17 cents to $110.92 a barrel. U.S. crude fell 51 cents to $96.56 a barrel.

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