GLOBAL MARKETS-Stocks rally on China, German data, euro gains

Wed May 8, 2013 4:46pm EDT

* Major equity indexes hit five-year peaks, Dow, S&P at
record highs
    * China reports stronger-than-forecast April trade data
    * March German industrial output also beats estimates
    * Euro rises on German data, copper gains on China


    By Herbert Lash
    NEW YORK, May 8 (Reuters) - Global equity markets and the
euro rose on Wednesday as strong Chinese trade data and signs
that Germany may escape a sharp  slowdown pushed shares to
five-year highs worldwide, with U.S. benchmarks climbing to
all-time records.
    Stocks on Wall Street rose after early declines and closed
on a surge, a pattern crude oil tried to follow. The U.S. crude
benchmark gained 1 percent, but North Sea Brent fell a tad as
concerns persisted over global demand. 
    China's daily crude imports in April rose 3.7 percent from a
year ago, customs data showed, while German industrial output
unexpectedly jumped in March, fanning hopes that Europe's
biggest economy is gaining strength. 
 
    The euro advanced against the dollar for a second straight
session as the unexpected rise in German industrial output pared
prospects of a near-term interest rate cut in the euro zone.
    The euro rose 0.58 percent to $1.3153 as the
safe-haven dollar softened and markets began to question
whether the ECB would need to cut rates again.
  
    Huge injections of liquidity from leading central banks to
boost their economies have fueled an equities rally and helped
to outweigh any doubts of slowdown in China's economy.
    "While the U.S. equity market is widely believed to be
tracking ahead of economic growth, broad market valuations are
fair and not at extremes, implying still further upside," said
Terry Sandven, chief equity strategist at U.S. Bank Wealth
Management.
    Although analysts cite the attractive valuation of stocks
relative to other assets, the magnitude and speed of the U.S.
rally have spurred talk of a pullback.
    The benchmark S&P 500 index is up 14.5 percent so far this
year and has climbed more than 6 percent in three weeks. Both
the S&P and the Dow closed at new highs, with the Dow closing
above 15,000 for the first time.
    It was the fifth successive closing high for the S&P, and
the second straight closing high for the Dow.
    MSCI's all-country world equity index, which
tracks stocks in 45 countries, rose 0.73 percent to a five-year
high before pulling back slightly as top European shares
followed their Asian counterparts.
    The FTSEurofirst 300 of leading regional shares
rose 0.7 percent to close at 1,229.43.
    The index has gained about 7 percent over the past three
weeks on strong support from central banks, which have promised
to keep interest rates low and increase money supply.
    "The market is on life support from the central banks. The
level of complacency in the market is very high at the moment
and we could get a correction anytime," FXCM analyst Nicolas
Cheron said. "It's time to take profits on a number of stocks
that have performed well lately, and to hedge the portfolios."
    The Dow Jones industrial average closed up 48.92
points, or 0.32 percent, to 15,105.12. The Standard & Poor's 500
Index rose 6.73 points, or 0.41 percent, to 1,632.69. The
Nasdaq Composite Index gained 16.64 points, or 0.49
percent, to 3,413.27. 
  

    Copper, one of the commodities tied most closely to
global growth prospects, jumped to a three-week high of $7,480 a
tonne before paring some gains to close 2.1 percent higher.
    The economic reports boosted other commodities despite
doubts about the quality of the Chinese data. 
    "We are lacking the catalyst in the numbers to suggest we
could go back to the highs reached earlier this year," said
Olivier Jakob, analyst at Petromatrix.
    Brent fell 6 cents to settle at $104.34 a barrel,
while U.S. oil rose $1.00 to settle at $96.62 a barrel.
    U.S. Treasuries prices turned higher, erasing early losses.
The benchmark 10-year U.S. Treasury note was up 3/32
in price to yield 1.7691 percent.
    Spot gold rose $21.17 to $1,473.10 an ounce. U.S.
Comex gold futures for June delivery settled up $24.90 at
$1,473.70 an ounce.
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