World stock markets up near record high; low yields help

NEW YORK Mon Jun 9, 2014 4:45pm EDT

1 of 4. A man walks past the London Stock Exchange in the City of London October 11, 2013.

Credit: Reuters/Stefan Wermuth

NEW YORK (Reuters) - Global equity markets edged higher on Monday, boosting a gauge of world stock performance to near an all-time high, as low interest rates bolstered sentiment even as U.S. Treasury yields rose.

Wall Street's Dow industrials and benchmark S&P 500 closed at all-time peaks, with the latter rising to its seventh record close in eight trading sessions.

Asian stocks earlier touched their highest levels in nearly three years. Europe also advanced as Spain, Italy and Portugal spurred regional indices on bets those markets would benefit most from last week's European Central Bank stimulus measures.

Peripheral European bond yields set record lows, with S&P's upgrade of Ireland's credit pushing it to a record low of 2.39 percent. Spanish 10-year yields fell below those of U.S. Treasuries for the first time since April 2010, and Italian five-year yields were also below U.S. equivalents.

The low European yields highlighted the policy divergence between the ECB and the Federal Reserve, which is reining in its monetary stimulus. But with U.S. yields low, some investors prefer equities over bonds.

"The support is coming from extremely low bond yields and action in Europe, so it gives investors no real alternative, no real reason to sell stocks," said Rick Meckler, president of LibertyView Capital Management in Jersey City, New Jersey, who also cited merger and acquisition deals.

MSCI's all-country world share index .MIWD00000PUS of stock performance in 45 countries was up 0.12 percent at 427.04, just shy of its November 2007 peak of 428.63.

The pan-European FTSEurofirst 300 index advanced 0.38 percent to close at 1,393.71, near a January 2008 high.

The Dow Jones industrial average closed up 18.82 points, or 0.11 percent, to 16,943.1. The S&P 500 gained 1.83 points, or 0.09 percent, to 1,951.27 and the Nasdaq Composite added 14.844 points, or 0.34 percent, to 4,336.243.

U.S. Treasuries prices fell, pressured by this week's $62 billion sale of new coupon-bearing debt and increased risk appetite after Friday's strong U.S. jobs report.

Benchmark 10-year notes were last down 4/32 in price to yield 2.6113 percent.

Among major currencies, the dollar continued to benefit from rising U.S. Treasury yields. The dollar index was up 0.28 percent.

The euro drifted as low as $1.3583 as the dust settled after last week's ECB activity. The euro last traded down 0.37 percent at 1.3591 against the dollar.

Brent crude rose as strong Chinese and U.S. data pointed to healthy economic growth and higher demand from the world's top two consumers.

Brent rose $1.38 to settle at $109.99 a barrel. U.S. oil rose $1.75 to settle at $104.41.

(Reporting by Herbert Lash; Editing by Dan Grebler)