* Europe's central banks follow Fed in leaving policy
* Official Chinese data and euro zone PMIs point to growth
* Dollar up from six-week low, euro dips
* European shares higher, oil gains
NEW YORK, Aug 1 Shares, the dollar and crude oil
all climbed on Thursday, with the S&P 500 stock index topping
1700 for the first time, as central banks in the euro zone and
Britain joined the Federal Reserve in keeping monetary policy
The European Central Bank and the Bank of England both ended
policy meetings by leaving rates at record lows, a day after the
Fed said the U.S. economy still needed its support and avoided
any mention of a change to its stimulus measures.
The promise of abundant liquidity came as data for July
revealed industrial activity picking up in the euro zone for the
first time in two years, greater stability in China's vast
factory sector and a surge in British production.
U.S. manufacturing grew in July at its quickest pace in four
months as output and new orders increased and firms took on more
workers, an industry report showed on Thursday..
A separate showed manufacturing growth was at its highest in two
"Bottom line, it's still free money everywhere - whether it
is in the U.S., the Bank of England, the ECB - they are all
saying the same thing and everyone is kind of loving it," said
Joe Saluzzi, co-manager of trading at Themis Trading in Chatham,
The Dow Jones industrial average was up 124.34
points, or 0.80 percent, at 15,623.88. The Standard & Poor's 500
Index was up 16.54 points, or 0.98 percent, at 1,702.27.
The Nasdaq Composite Index was up 37.77 points, or 1.04
percent, at 3,664.14.
The better outlook encouraged investors back into riskier
assets, lifting MSCI's world equity index nearly
1 percent, sparking a rally in major euro zone government bonds
and sending U.S. crude up 2.4 percent to $107.57 a barrel
The dollar index, which tracks the greenback's performance
against a basket of major currencies, gained 0.92 percent to
82.199, though still not far from a six-week low touched
on Wednesday after the Fed's policy announcement. The U.S. data
caused a big jump in the dollar as investors took it as a sign
of steady improvement in the U.S. economy.
Hopes are also rising that Friday's key July U.S. payrolls
report will point to another solid rise in jobs.
However, traders said a strong employment report would
increase the likelihood the Fed could begin scaling back its
stimulus in September - a move that could hurt the gains in
equities and commodities though it would support the dollar.
"We're very much looking for the dollar to continue to gain
support, given the heightened expectations for nonfarm payrolls,
which are centred around the 200,000 mark," said Ian Stannard,
head of European FX strategy at Morgan Stanley in London.
Employment outside the farming sector is seen rising by
184,000 during July, according to economists polled by Reuters.
The euro slipped 0.5 percent to trade around $1.3226,
off Wednesday's six-week high of $1.3344.
The encouraging Chinese manufacturing data, along with some
strong corporate earnings and central bank actions, combined to
lift European shares 0.9 percent.
Earlier, after the improvement in China's official
industrial activity survey eased concerns of a sharp slowdown in
the world's second-largest economy, Japan's Nikkei jumped 2.5
percent for its biggest one-day gain in three weeks.
In the fixed income markets, U.S. Treasuries prices extended
losses on Thursday after the ISM report. The benchmark 10-year
Treasury note was down 22/32, sending its yield to