* World shares gain as China signals support for growth
* S&P 500 index hits intraday record high, near 1,700
* Dollar index falls to one-month lows
* Copper, oil prices rise on optimism over China
By Richard Leong
NEW YORK, July 23 World stock markets rose to
near five-year highs on Tuesday, boosted by views that China was
moving to support its cooling economy, while the dollar fell to
Major U.S. equity indexes were flat to slightly lower after
a mixed batch of earnings, including from chemical maker DuPont
and insurer Travelers.
The Standard & Poor's 500 index set an intraday record high
and came within 2 points of its milestone of 1,700 before
Copper prices rebounded from early losses after China's
president, Xi Jinping, in remarks published on Tuesday,
emphasized the government's determination to restructure the
country's slowing economy. Yields on low-risk U.S. and German
government debt rose as higher equity prices reduced their
Oil prices also rose on optimism on China, as did shares of
mining companies. Local media in China reported the government
was looking to increase investment in railroad projects to help
relieve a capacity glut in steel, cement and other construction
"Managing to keep (Chinese growth) above 7 percent will
certainly be viewed as a positive stance," said IG Markets
analyst Alastair McCaig in London.
The MSCI world equity index, which tracks
stocks in 45 countries, climbed 0.27 percent to 376.58, close to
the five-year high set in May.
In afternoon trading, the Dow Jones industrial average
was up 45.46 points, or 0.29 percent, at 15,591.01. The
Standard & Poor's 500 Index was down 0.46 points, or 0.03
percent, at 1,695.07. The Nasdaq Composite Index was
down 12.90 points, or 0.36 percent, at 3,587.49.
Wall Street has moved higher in 11 of the past 12 sessions.
The S&P 500 is up about 20 percent for the year.
But U.S. shares will likely struggle to extend their winning
streak unless there are more upbeat earnings and economic
developments, analysts said.
"Valuations are decent, there's positive monetary pressure,
earnings are just OK... It's hard to get people excited but the
market keeps grinding higher," said John Manley, chief equity
strategist at Wells Fargo Funds Management in New York.
"It will be slow over the summer, but the market will have
an upward bias."
Apple Inc. is due to report after the closing bell.
The tech giant is expected to post a smaller quarterly profit
and its financial report will likely come under intense
scrutiny. The stock was down 0.8 percent at $422.73, reducing
its gain since the end of June to 7.4 percent.
European top shares closed lower on a late wave of selling,
with semiconductors group STMicroelectronics leading the way
down after weak results. The broad FTSE Eurofirst 300 index
closed down 0.3 percent at 1,207.16. Chipmaker
StMicroelectronics tumbled 10.4 percent to 6.735
But mining shares rose on the news out of China, with Anglo
American rising 2.1 percent and BHP Billiton
gaining 2.0 percent.
In Asia, an upgraded economic outlook from Japan's
government lifted Tokyo's Nikkei stock index 0.82
percent to 14,778.51.
DOLLAR SLIPS AGAIN
The dollar fell to one-month lows against a basket of
currencies as an early bounce faded.
Investors earlier bet that the currency recently had
declined too far, too fast despite the debate about when the
Federal Reserve would begin to slow its stimulus measures.
Fed Chairman Ben Bernanke's dovish remarks have emphasized
that the U.S. central bank's bond buying will continue in some
form and interest rates will likely remain low for the
Heightened expectations that Japan's government will stick
to expansionary policies after weekend elections weakened the
dollar against the yen on Monday. The victory in
parliament's upper house election on Sunday cemented Prime
Minister Shinzo Abe's hold on power and gave him a stronger
mandate for his programs to stimulate the world's third-biggest
An earlier rise in U.S. 10-year Treasury note yields above
the 2.50 percent level ahead of this week's $99 billion in
coupon-bearing supply briefly propped up the dollar.
The benchmark 10-year U.S. Treasury note was down 8/32 in price
with a yield of 2.514 percent, up 3.0 basis points on the day.
The German 10-year Bund yield, meanwhile, was
1.552 percent, little changed from Monday's close.
The dollar index fell 0.3 percent to 81.971. The
greenback was 0.12 percent weaker against the yen at 99.50 yen
after briefly trading back above the 100 yen level, while
it was down 0.4 percent versus the euro at $1.3231.
In the commodities market, copper gained 0.27
percent at $7,048 a tonne in London, erasing early losses linked
to worries about a supply glut and sluggish global demand.
Oil prices rebounded from early lows on optimism about
China's efforts to avert a hard-landing of its economy. Brent
oil settled up 27 cents, or 0.25 percent, to $108.42 a
barrel, while U.S. crude futures ended 29 cents, or 0.27
percent, higher at $107.23 a barrel.
Gold prices turned higher in late trading, managing a fourth
straight day of gains. It last traded 0.64 percent higher at
$1,343.50 an ounce as the dollar's losses grew. Gold has
recovered nearly $160 from a three-year low of $1,180.71 on June