GLOBAL MARKETS-Wall St leads global shares higher; oil falls

Tue Apr 1, 2014 1:27pm EDT

* Brent, U.S. crude futures prices tumble
    * S&P 500 hits record high
    * ISM manufacturing data offers reassurance on U.S. economy
    * Emerging market share index at highest level since Jan 2

 (Updates prices, changes comments, adds details)
    By Rodrigo Campos
    NEW YORK, April 1 (Reuters) - World equity markets added to
recent gains on Tuesday as Wall Street hit a record high after
strong factory data, while soft manufacturing numbers in China
reinforced expectations that the country will undertake stimulus
measures.
    Crude oil futures tumbled, with U.S. crude pressured by
expectations for a build in domestic inventories and Brent by
lackluster data in China and Europe.
    Spot gold hit a seven-week low and prices of other
safe-havens like U.S. Treasuries and the yen also fell. Two
surveys on Tuesday showed that manufacturing in China struggled
in March, bolstering talk that Beijing will bring in selective
stimulus. 
    In the United States, however, manufacturing growth
accelerated for a second straight month in March as production
recovered, relieving fears that the economy had hit a stumbling
block.
    "We're starting the second quarter with signs that the
economy is maintaining the kind of reasonable growth that will
continue to support the (equity) market," said Jim McDonald,
chief investment strategist at Chicago-based Northern Trust
Global Investments.
    The S&P 500 hit a record intraday high shortly after
the manufacturing data, boosting the MSCI's world stocks gauge
, which was up 0.4 percent in afternoon trading.
    In New York, the Dow Jones industrial average rose
39.79 points or 0.24 percent, to 16,497.45, the S&P 500 
gained 6 points, or 0.32 percent, to 1,878.34, and the Nasdaq
Composite added 41.131 points, or 0.98 percent, to
4,240.125.
    The S&P earlier hit an intraday record high at 1,884.60.
    European stocks rose, lifted by merger activity as well as
robust French factory data. The FTSEurofirst 300 index
of top European shares closed up 0.56 percent at a three-week
high. 
    An index of emerging market shares topped the
1,000 level for the first time since Jan. 2 and was up for an
eighth straight day, supported by Federal Reserve Chair Janet
Yellen's comments a day earlier on the need for "extraordinary"
commitment to support the U.S. economy.
    Anxiety over the possibility of rising U.S. interest rates
has kept emerging market assets and currencies under pressure
for months.
    Yields in longer-dated U.S. Treasuries rose on the upbeat
U.S. manufacturing data, while intermediate-dated Treasuries
yields held steady in the wake of Yellen's comments.    
    The benchmark 10-year U.S. Treasury note was
last down 7/32 in price to yield 2.748 percent, compared to a
yield of 2.724 percent late Monday.
    
    EURO UP, GOLD SLIPS
    The expectation of Fed support kept the U.S. currency under
pressure from the euro, but the dollar hit a session high
against the yen after the U.S. manufacturing data.
    Traders were also awaiting Friday's U.S. payrolls data.
    The euro's gains versus the greenback remained capped by
talk the European Central Bank, which meets on Thursday, may
have to cut interest rates again in coming months to keep
deflation at bay.
    The euro was up 0.2 percent at $1.3799.
    The yen, another traditional safe haven, slipped to a
three-week low against the dollar. It was last down 0.4
percent at 103.57 per dollar.
    Among commodities, Brent crude fell 1.5 percent to 
$106.15 a barrel after the Chinese data and on the possibility
of a jump in supplies from Libya after rebels blocking eastern
oil ports hinted at a deal with Tripoli. U.S. crude was
down 1.6 percent to $100 a barrel, pressured by expectations for
a build in domestic inventories.
    "With the disappointing economic numbers out of China and
the inventory build, we're driving lower until Friday when we
get the next (U.S.) employment numbers," said Gene McGillian, an
analyst at Tradition Energy in Stamford, Connecticut.
    Spot gold, one of this year's surprise star
performers after a 2013 slump, hit a seven-week low of $1,278.34
per ounce. It was recently down 0.3 percent at $1,280. The price
is still up more than 6 percent year-to-date.


 (Reporting by Rodrigo Campos; additional reporting by Ryan
Vlastelica, Sam Forgione, Elizabeth Dilts and Michael Connor;
Editing by Leslie Adler)
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