GLOBAL MARKETS-Dollar, gold rise as economy suggests Fed move
* Nasdaq positive on gains in Apple, BlackBerry * Gold rises more than 2 percent; gold ETF draws inflows * Dollar edges up but still near seven-week low By Herbert Lash NEW YORK, Aug 12 (Reuters) - The U.S. dollar and gold rose on Monday as signs of economic recovery pointed to the likelihood of near-term cuts in central bank stimulus, while global equity markets were mostly flat. Chinese shares jumped more than 2 percent on news that factory output grew in July at its fastest pace so far this year, the latest sign suggesting the world's second-largest economy may be stabilizing after more than two years of slumping growth. Mining stocks rose on the Chinese data. In London an index of heavyweight basic resources stocks advanced 1.2 percent, while the Hang Seng Index closed 2.1 percent higher and the CSI300 index of leading Shanghai and Shenzhen shares rose 2.9 percent. The dollar gained on rising expectations that strong U.S. data will prompt the Federal Reserve to act sooner rather than later to trim its monthly purchase of about $85 billion in bonds. The next test of this view will be Tuesday's retail sales reading, which most expect to be strong. Gold hit its highest level in nearly three weeks in thin trade, and the world's biggest gold exchange-traded fund, SPDR Gold Trust, recorded its first inflow in two months on Friday, growing by 0.2 percent to 911.13 tonnes. Spot gold rose as much as 2.2 percent to $1,343.06 an ounce, its highest since July 24. It was last at $1,334.96. Several Fed officials have said the central bank could move as early as September if the U.S. economy continues to improve. But many investors fear slower growth without the Fed's support, which has helped fuel a nearly 19 percent gain in the benchmark S&P 500 index so far this year. Some investors believe the equity market's recent stall is nothing more than a pause in the rally. "This is a back-and-fill after the remarkable move we've seen this year, and that's healthy," said Chris Bertelsen, chief investment officer of Global Financial Private Capital in Sarasota, Florida. Shares of smartphone maker BlackBerry rose 7.8 percent to $10.52 after the company said it had set up a committee to explore strategic alternatives, including a possible sale. Shares of Apple Inc rose 2.9 percent to $467.36 after technology blog AllThingsD reported the company is expected to present its redesigned iPhone in September. Signs that China's slowdown may have run its course and expectations that data this week will indicate the euro zone is pulling out of its longest recession on record are bolstering hopes that the global economy is gaining strength. Wall Street was little changed, with the Nasdaq slightly higher. European shares closed a hair above break-even. MSCI's all-country world index, a measure of 45 equity markets around the world, was down 0.11 percent. The Dow Jones industrial average fell 26.22 points or 0.17 percent, to 15,399.29, the S&P 500 lost 3.34 points or 0.2 percent, to 1,688.08 and the Nasdaq Composite added 8.109 points or 0.22 percent, to 3,668.217. "We shouldn't equate the all-time highs with the market being rich. There's still value in the market, but in the short term we've gotten ahead of ourselves," said Matthew Keator, partner in the Keator Group, a wealth management firm in Lenox, Massachusetts. European shares steadied around two-month highs. The FTSEurofirst 300 index of top regional shares closed up 0.04 percent at 1,230.03. The dollar slipped against the yen early on Monday after data showed Japan's economy grew an annualized 2.6 percent in the period from April to June, a third straight quarter of expansion, though slower than expected. But the yen then reversed gains, with the dollar up 0.36 percent at 96.55 yen. Against the euro, the yen was up slightly at 128.45. The benchmark 10-year U.S. Treasury note fell 3/32 to yield 2.5928 percent. Brent crude oil dropped below $108 per barrel after a sharp rally on Friday. Losses were checked, however, by supply outages in major producers Libya and Iraq. Brent was up 30 cents to $108.52 a barrel. U.S. crude fell 14 cents at $105.83.
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